Life Happens

Wanna know how often a typical family's monthly budget goes exactly as planned? Maybe 10% of the time if I'm being honest. This is a conversation I frequently have with clients as they begin their budgeting journey. There's usually this moment within the first few months of the process where my client feels defeated; a failure of sorts. In their mind, a budgeting win means that every category gets nailed right on the head.

Life doesn't happen on paper, unfortunately. It's messy. It's sudden. It's imperfect. We can have the world's best budget to start the month, but life has other plans. Success doesn't mean nailing the budget just as we've outlined it. Rather, success is our ability to track, be aware of our changing reality it in real-time, and make the necessary adjustments along the way to account for life happening in hopes of landing on even footing by the time the month concludes.

This month is a great example for my household. Due to my back injury, we're going to face significantly more out-of-pocket medical expenses than planned. Given the stress we've been under, we'll likely also blow past our planned dining out budget. Now, we can't just throw our arms up in the air and play the victim card; nobody wins under that scenario. Instead, we must take accountability for the life that's happening, first by being fully aware of its impact, and second by making the necessary adjustments.

What this looks like for Sarah and me is a combination of things:

• A reallocation of the dollars we had already planned to spend. Some of our discretionary spending will be reallocated to the increased categories. We may also temporarily reduce the recurring savings we push toward a few of our sinking funds.

• An additional allocation of funds from emergency savings. We don't typically touch our emergency fund (that's why it's called an emergency fund), but that's what it's for. It exists for exactly this purpose.

• A deferral of a few other priorities. There are some decently important obligations in our lives, but for at least this month, those priorities must move down the list.

These newfound expenses don't deem December a failed month for us, but how we respond will. It's not ideal, and it's tremendously frustrating, but that's life. Life happens. Life always happens. It's just our job to adapt along the way.

Whether you're having the world's best budgeting month, or the worst, success or failure isn't determined until you decide how to handle it. It'll never be perfect, but you don't have to give up control.

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What Am I Missing?

Sarah and I have been creating, following, and tracking monthly budgets since we got married. Given we've been married for 15 years, that means we've done this 180 times now!

I'll die on the hill that BOTH spouses need to be involved in the budgeting process. However, that doesn't mean both spouses need to create and track it. Oftentimes, one spouse will be more inclined (interest-wise or skill-wise) to do the heavy lifting. In the case of my household, I married someone who is allergic to numbers. Therefore, in order to protect Sarah's health, I take the lead on all things numbers-related.

With that said, this doesn't give her an out from dealing with the finances. Rather, it just means she plays a different role. When it comes time to create our monthly budget, I never dictate it to her. It's never, "Hey Sarah, here's our budget for the month." That would be a terrible way to do it (though it's how most marriages work, unfortunately).

Instead, I always create the first draft of the budget and give it to her for feedback. Early in our marriage, I'd ask her, "How does this look?" This type of question typically led to a natural answer: "Good." Shoot, that's not what I needed!

Then, I quickly realized I needed to take a different approach. For the last 14+ years, I've asked a different question: "What am I missing?" Sarah loves telling me what I missed! Thus, I get lots of feedback from her. She's getting her hair done, we have family member birthdays, turns out the kids keep growing and need new clothes, what about that appliance we agreed to buy a few weeks ago?!? A simple question with a handful of responses can turn a good budget into a great one. We don't always have a great budget, but more often than not we do.

Just a slight tweak in our framing can change the entire dynamic of the conversation. Sarah will never claim to be interested in finances or strong with numbers, but she's been a great partner in our effort to create, follow, and track our monthly budgets. It hasn't been perfect, but it's been good. And oftentimes, good is the gateway to unlocking our hopes, dreams, aspirations, and callings.

I can't stress enough how powerful budgeting can be in a marriage. Powerful for the relationship, powerful for the finances, and powerful for the journey. After doing this for 15 years together, I can confidently testify that we would be nowhere near where we are today without these practices.

What about you? Is it time to get your spouse involved? If your spouse is the one already doing it all, perhaps it's time for you to get involved? Marriage is meant to be a team, finances included. Please allow money to be a unifying force in your marriage, not a source of tension as is often the case. You deserve better!

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A Good Ol’ Fashioned Audit

Never underestimate our human instinct to practice the status quo. It's so much easier to keep doing what we're doing, even when doing something different would be in our best interest.

Nowhere is this concept more applicable than when I'm meeting with new clients. While my client might have been doing the same things for the past decade, I challenge every category in their budget. It can be a startling moment for people. Yeah, I understand you've been paying $25/month for xyz service for the past 15 years, but does it add more value today than it's costing you?

You wouldn't believe how many expenditures in our lives fall into the camp of not being as valuable today as they once were. Yet, we keep them around out of habit (and the path of least resistance). Here's one example. One of my clients is paying $80/month for a service. Upon asking them about it, they said it's something they've paid for about 12 years......so, naturally, it should stay. I asked a few more challenging questions. Turns out, they don't utilize the service nearly as much as they used to. Meanwhile, the price is nearly triple what it used to cost. If they are using it half as much as they used to, and it costs three times as much as before, it's only 1/6 as valuable to their lives as it once was. Through that lens, it became the world's easiest cancel.

After going through this exercise across their entire financial life, this couple managed to cut nearly $400/month of expenditures without giving up much value. Overall, huge win! A good ol' fashioned audit can be a breath of fresh air.

As the year comes to a close, I challenge you to perform a good ol' fashioned audit on your finances. Seriously consider what's adding value, and what's not. It's not about spending less, but rather ensuring that you're getting as much value (or more) than you're paying. Some cheap expenditures are rip-offs, while some expensive expenditures are bargains. It's an interesting exercise, and one I think you'll be grateful for engaging with. Happy hunting!

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Everything and Nothing

I was casually reviewing the finances of a young couple a few weeks ago; all normal stuff. Item by item, we checked off my list. Then, we got to savings. "How much do you have in savings?"

"We have $25,000 in our savings account."

"What is that account used for?"

"It's used for everything. We just throw money in it whenever we have extra, and that savings account is used for everything."

"By everything, do you mean nothing?"

***Uncomfortable laughter arose from both spouses.***

I want to share a massive behavioral science hack when it comes to saving. If you just blindly and arbitrarily dump money into a savings account that's intended for everything, it's actually used for nothing. Why? Because when something is for everything, then every penny spent on something is another penny that can't be spent on something else. We become paralyzed; everything becomes nothing.

The natural next step is that we simply become hoarders. If our savings account is for everything, then there's no amount of money that's enough. After all, everything is a lot of money.....infinite money. Thus, we simply hoard.

Then, if we're hoarding money into an "everything" savings account, there's a series of opportunity costs:

• We don't actually save for our future needs in life.

• We feel guilty for spending money on wants.

• We don't get around to investing for our future.

• We don't even get close to opening up our generosity.

Everything stalls at the blind saving.

Here's my suggestion. Open a series of savings accounts. Name them. Give each a purpose. Needs savings. Wants savings. Then, in your monthly budget, specifically allocate money to them. Actually fund them. If you say you're going to save $500 in your Travel Fund savings account this month, move $500 into your savings account this month.

Once that happens, it's technically already been spent: travel. Therefore, there's no doubt what that money is to be used for. It's sitting in a dedicated savings account specifically for you to enjoy on a trip. No guilt. No second-guessing. No doubts. It's already been saved. Now, enjoy! The same goes for every other category. Be specific. Be intentional. Don't psych yourself out. Honor the promises you made to yourself.

This one little hack can transform our relationship with money. I encourage you to give it a shot!

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Accountability, But With Grace

A few days ago, I shared my It's Gotta Come From Somewhere principle. When we screw up our budget (when, not if), we can't give yourselves a free pass, nor can we take the path of least resistance by robbing our savings, throwing it on a credit card, or melting away our cushion. Instead, once we blow our budget, our immediate mission is to reallocate cash from a different category to fill the gap.

One nuance I don't think I delivered properly was the importance of giving ourselves grace in the process. Don't beat yourself up. Don't linger on the failure for days, weeks, or months. Don't let it define you. Don't get into constant fights about it with your spouse. Forgive yourselves (and each other!) and move on.

It doesn't have to be one or another. We don't have to choose between dealing with the consequences OR giving ourselves grace. Instead, we should deal with the consequences of our mistakes WHILE giving ourselves grace. Grace does not mean the absence of consequences and accountability, just as the presence of consequences and accountability does not mean the absence of grace.

I work with couples who still can't get over $1,000 mistakes they made nine years ago. Nearly a decade later, they still beat themselves and each other up over it. They've long ago dealt with the consequences of their mistakes, but haven't found a way to offer grace yet.

I'll say something profoundly obvious and simple: We can't live a truly meaningful life if we're dwelling on past financial mistakes. Let's say you made a $1,000 screw-up 12 months ago, and you've been carrying it with you. What you're essentially telling yourself is that your happiness and fulfillment are worth a mere $1,000. I don't think that's true, and you probably don't, either, but your attitude toward the mistake says otherwise.

Here's my challenge for you today. Think about your past financial mistakes, regrets, and screw-ups. Think about each one of them. Which ones weigh on your conscience? Which ones linger within you? Please find a way to give yourself grace and move on. You can't undo what's happened in the past, but you can CHOOSE to stop letting it impair your present.

Accountability, yes. Consequences, yet. But always grace, too.

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It’s Gotta Come From Somewhere

As the month winds down, Sarah and I realized we bombed a few of our budget categories. Specifically, we totally botched the kids, dining out, and entertainment categories. Part of this was due to the kids' birthday, but another part was just negligence. We fell asleep at the wheel.

It's not ideal, but it's also not the end of the world. With that said, there's still no free pass. As I tell all my coaching clients, "It's gotta come from somewhere." It's okay to whiff on categories every once in a while, but when we do, the money has to come from somewhere. Dipping into savings, tapping credit cards, or further depleting our checking account balance aren't great answers. Instead, it comes down to reallocating money in the budget.

Let's say we overspend on a handful of categories by $500. There's only so much income coming in this month. In other words, we need to figure out where we can find $500. In our particular situation, it's going to come from an important savings goal we established a few months ago. Instead of setting money aside for this particular item, we need to reallocate that cash in our budget to subsidize our mistakes. It hurts, but it's pure.

That sucks, and that's the point! When we don't allow ourselves free passes to be negligent or irresponsible, it provides an added layer of accountability. I hate that we screwed this up, in part, because I hate the consequence of not being able to set money aside for an important purchase. On the flip side, we need this level of accountability so we'll be better next time.

And we WILL do better next time. These things are too important for us to continuously screw up. We made a mistake. We fixed the mistake. Now, we must do it better in October so we can achieve our goal. It's simple, but powerful.

Don't give yourself a free pass. When you screw up, it's gotta come from somewhere. Don't allow yourself to live without consequences or accountability; that's a recipe for disaster! Short-term disaster. Medium-term disaster. And most importantly, long-term disaster.

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A Little Discretion Goes a Long Way

If you know me, you know I LOVE food! I have a soft spot in my heart for unique and memorable dining experiences. I deeply treasure the financial investment in a good meal at a restaurant.

At the same time, I feel like so much of my coaching work is spent trying to encourage families to tone down their dining out spending. It's not that I'm against dining out (obviously), but sometimes a family's dining out spending is actually detrimental to their broader objectives.

For example, let's say a family is trying to pay off a bunch of debt or commit to investing. For multiple reasons, there's just not enough margin in the budget to make meaningful progress in these goals. Therefore, we scan their budget to find ways to free up margin. Here's how one of those recent conversations played out. About three-quarters of the way down the budget, we find this: "Dining Out: $800." This is a single-month number for two parents and two under-10 kids.

This is the moment where I point out that perhaps $800 is a bit heavy.

"But we hardly even go out to eat. We maybe go out once per week. I don't think we can cut this category."

**This is me doing my best to keep a straight face**

I happen to live in a family with two parents and two under-10 kids, and live in the same town they do.

I didn't do a good job of keeping my straight face, and they could see my skepticism. "It costs at least $120 just to go to xyz restaurant. Going out to eat is ridiculously expensive these days!"

It was ironic they used xyz restaurant as an example, as my family just visited xyz restaurant the prior week.

"Well, I took my family to xyz restaurant last week, and our total bill was $45."

"That's impossible!"

We compared notes. When my family goes to this restaurant, we order three entrees and eat family style; plenty of food! We also get water. No appetizers, no desserts. When they go to this restaurant, they each order a full adult entree.....which is beyond overkill for their family. But first, they start with an appetizer or two. Everyone also gets a "fun drink," as my kids call them. Lastly, they might get some desserts to polish off the night.

A little discretion goes a long way. Please don't hear me condemning their dining experience. I'm all for going all-in on dining. However, it's a party foul to use no discretion, spend $120 for what could have been accomplished with $45, call it a need, and subsequently whiff on your goals. Sometimes, we need to have boundaries.

For those of you interested, my family's monthly dining out budget averages $250 these days. It's rarely glamorous, but it does provide a margin for multiple outings with my family each month, plus a date night. We could definitely push this number higher, but for now, it allows us to knock out some other goals. There's a season for everything.

A little discretion goes a long way. Please don't allow "normal" to sweep you away and rob you of your goals that matter most.

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Our Eyes Deceive Us

One of my favorite parts about creating content is the fact it will, in theory, live forever. Every once in a while, I'll receive an e-mail, DM, or text from someone who recently stumbled upon something I published years ago. Those are always fun days for me. A few days ago, I had a similar experience when I ran into a close friend at an event.

"Travis, I can't believe you and Sarah spent $1,000/month on travel! That seems like a lot. An irresponsible a lot."

He was referring to episode 240 of our Meaning Over Money Podcast, which was published two years ago. His wife recently listened to the episode and now thinks they should budget $1,000/month for travel. Translation: He's semi-angry at me for causing his wife to want more travel money.

"And you think $1,000 is too much?" I asked him.

He confirmed that, yes, $1,000 is a stupid and reckless amount to spend on travel.

"It's funny you would say that, considering you and your wife easily spend 2-3x that amount."

He was confused. I could tell he wanted to be defensive, but he was waiting for what I had to say next.

"You just went to Disney, right? Let's do some mental math and figure out how much that trip cost."

About 90 seconds later, we landed on a total rough number: $13,000.

"And you and your wife went to a resort a few months ago, right?"

We did some more quick math: $5,000.

"What other trips have you taken in the last 12 months?"

He comes up with a handful of other trips, some small and some medium-ish.

It was a fun exercise. After about 10 minutes, we tallied what felt like a complete prior-12-month travel number: $41,000.

His eyes got pretty big. $41,000 on travel over a 12-month period! Put into monthly terms, that's about $3,400/month, every month, for the entire year. Remember, this conversation started with him believing my family's $1,000/month travel budget was irresponsible.

No, he wasn't trying to be a hypocrite. No, he wasn't trying to be a jerk to me. The truth is, our eyes deceive us. Our brains are wired in such a way that we easily lose context depending on how something is framed. In his financial life, things are framed through the lens of no budgeting, impulsive trips, and rampant credit card use. Therefore, no thought goes into their travel. They decide they want to go, they just go, they spend whatever they spend, then they pay it off upon returning.

$1,000/month feels like a lot of money because it happens every month. In his world, it looks more like $0, $0, $0, an unknown trip cost, $0, another unknown trip cost, $0, $0, yet another unknown trip cost, etc. It's a lot of zeroes and a lot of unknowns, which add up to $41,000 in no time.

Two key takeaways today: 1) We must continually strive to view things through a proper lens. Context always matters. 2) We need to be intentional, thoughtful, and disciplined with our finances. The absence of either creates chaos and leakage, but the presence of both leads to less stress, more peace, and a greater sense of meaning. Happy travels!

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Just Until You Die

One of my clients is absolutely crushing it! Husband and wife, mid-30s, two small children. They got on the same page, started budgeting, paid off a ton of debt, unlocked generosity, pursued work that matters, and are aggressively living their values. They are in a position to fire me at any time! Mission accomplished.

During a recent meeting, they asked me a curious question: "When did you and Sarah decide you were good enough at your finances to quit budgeting?"

I just stared at them; I was floored. Part of me was trying to figure out if they were joking, but once I realized they were serious, I composed myself before mustering a response: "Budgeting isn't something you have to do forever......just until you die."

Truthfully, once budgeting becomes a steadying force in our financial lives, it's impossible to envision life without it. I can't even fathom going a single month without a planned and executed budget. That would feel weirder than wearing only a Speedo to work. It's unconscionable! There's no reality, no wealth, no income, and no situation that would prevent Sarah and me from budgeting. It doesn't matter if I make $10 or $10M this month, there will be a budget.

Out of curiosity, I asked several of my clients for their perspectives on this topic. For people who have been budgeting for six months or less, they were 50/50. About half said they couldn't imagine not budgeting, while the other half said they could stop tomorrow. I expected this answer, as these habits aren't yet fully engrained, nor are the results obvious. For people who have been budgeting for at least one year, 100% of them said it's an absolute non-negotiable in their life and marriage. There WILL be a budget, and life is better for it.

Budgeting is one of those weird things that feels weird and foreign if you've never done one, but once it's fully integrated into your life, it would feel weird and foreign to not have one. If you're someone who feels like budgeting would be weird or foreign......or lame, restricting, fun-killing, soul-sucking, boring, tedious, or difficult, perhaps today is the day to give it a shot.

If it feels too intimidating or you don't know where to start, hit reply to this e-mail, drop a comment below, or e-mail me at thedailymeaning@gmail.com. I'd love to answer your questions or provide you with some additional resources. It's not nearly as hard as you might think, and it's most definitely more powerful than you'd ever believe.

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While the Sun Is Shining

Here's a little game we play in our financial coaching meetings. For whatever topics we're discussing (whether debt payoff, saving, giving, or investing), we run the numbers and determine, "If you do $x every month for y months, you'll meet your goal by _____ date."

This math is straightforward......and linear. One problem, though. Life isn't straightforward or linear. It's anything but either of those. Today's reality could disappear in a heartbeat, only to be replaced with a drastically different set of circumstances.

This is where it gets murky. Oftentimes, people want to know how little they can do each month to accomplish a goal by a certain date. In other words, if everything goes perfectly and life doesn't alter a bit, what is the least sacrificial path to achieve the desired goal? I think this is a recipe for disaster. After all, nothing goes perfectly, and whether we acknowledge it or not, our lives will be altered multiple times in the months and years to come.

Instead of taking this approach, I encourage people to make hay while the sun is shining, as the saying goes. We don't know what tomorrow will bring, so why not maximize the impact of today's reality? If you have extra money to throw at your debt over the next several months, throw it. If you have increased resources to contribute to your investments, harness them. If you're able to make more progress on your savings in the near term, embrace it. We don't know what will happen tomorrow!

A natural question spawns from this idea: "Well, what happens if we get too far ahead of our desired goal?"

This is a fantastic problem to have. It does NOT mean that we get greedy or selfish and turn ourselves into a hoarder. Instead, it gives us freedom and flexibility. If we make hay while the sun is shining (i.e., get more aggressive in the near term), we will inevitably have less pressure on us in the future. In other words, getting quicker momentum in the near term allows us the ability to downshift our intensity in the longer term. This could mean different career decisions, more money for generosity, and less financial pressure. This is a beautiful byproduct of making hay while the sun is shining.

There's no reason to arbitrarily put more pressure on our future selves. That's one reason not to go into debt or saddle ourselves with undo expenses. On the flip side, making hay while the sun is shining is also a tremendous way to combat the inevitable pressure our future selves will face. My clients who embrace this opportunity report significantly higher levels of satisfaction, peace, and freedom. It changes EVERYTHING.

I'll share some real-life examples in a future post (including from my own life), but in the meantime, I encourage you to ask yourself what area of your life you need to make hay while the sun is shining. Instead of doing as little as possible to eventually meet your goal, what can you do today to lighten the load for future you?

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A Dollar For a Dollar

One of my clients confessed to me that one of their budget spending categories adds almost zero value to their life. I'm not even going to share which category it is, as it's not important.....use your imagination.

Why, then, do they even spend money on x category? There's no real rhyme or reason other than they've always spent money on it, and everyone else does, too. When I pressed them on why they continue to spend this money even though it adds little to no value to their lives, they responded, "Well, it's not much money, so why does it matter?"

It's true. We're not talking about a ton of money here. Maybe $50 per month. However, there's a broader implication here. The problem isn't that they are spending $50 on this particular category. The problem is that every dollar we spend on one thing is a dollar we don't get to spend on something else. That's when I flipped the script on them. "If you could add $50 to any category in your budget, what would it be?"

Both of their eyes lit up. One immediately shouted, "Personal spending!" The other rebutted, "Travel or dining out."

See the difference? They had zero emotional energy when discussing this random $50 spent on a lame category in their budget, but when we looked at it through the lens of a dollar for a dollar, they lit up. This is the real friction of opportunity cost.

I spent many hours per week helping families recognize the true opportunity cost in their financial lives. It's wild how many of us mis-spend our money on something that matters not, when there are so many other uses that would move the emotional needle for us.

Maybe it is only $50, or $100, or even $10. If you're spending money on something that doesn't matter to you, reframe it through the lens of what you could be doing with it that would matter. Then, do it!

Here's my challenge for you today. Find some amount of money in your monthly spending that's not adding much (or any) value to your life. Then, rip it away from that lame category and repurpose it into a better category that you actually care about. Sure, it might not change your financial world, but it will absolutely move the needle in more ways than one.

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Tsunami or Drizzle

One of my clients has a storm approaching. They have two normal incomes and a small child. One spouse is about to lose their job, and the family will soon experience a 50% decrease in its take-home income. Talk about scary!!

Here's the thing about storms. It's not a matter of if a storm is coming, but when. That's what life promises us, and man, life sure does deliver! So, since we know a storm is coming, the next question is how bad said storm will be.

While this couple hasn't been together all that long, both spouses have spent the last 10 years of their lives setting the foundation for where they are now. Sure, I've helped them in their journey, but they had already done so many amazing things before I arrived on the scene. Here's a quick summary:

• No debt (this is huge!)

• Below-average housing costs

• Sizable taxable investment account (game-changer!)

• Conservative lifestyle

• Prioritization of family over stuff and status

• They live life with a posture of contentment and generosity

They've been nervous about the oncoming storm......as they should be! It's absolutely terrifying. We recently took inventory of their situation and worked through their new reality budget. We titled it, "Oh crap!" In it, we discerned what categories needed to be cut or decreased once the storm hits.

When we got to the bottom, they were met with a shocking discovery. After losing half of their income and making whatever cuts they could, the net result was only a $600 monthly budget shortfall. Combine this with the nice taxable investment account available to help them weather the storm, they are in amazing shape! Instead of the impending storm looking like a destructive tsunami, it will more closely resemble a slight drizzle.

Instantly, I could see relief in their eyes. What started as fear turned into confidence. All the hard work they've put into this over the years is about to culminate soon, and they are so grateful for the situation they've put themselves in.

The question isn't whether or not a storm is coming.....it is! The question for you today is what that storm looks like. Will it be a destructive tsunami that will potentially wipe you off the map? Or will it be a slight drizzle that you can confidently navigate? Perhaps today is a great day to start preparing for the storm.

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Crazy Friend Update

A few years ago, I wrote an article about my crazy friend. He's a mess with money. Longtime readers might remember this friend, but if not, I'll summarize their financial situation. The family's annual household income was about $270,000. That's a great income, except their annual household expenses were around $360,000. That means, each year, they spent $90,000 MORE than they made. How did they pull off this feat? Well, debt, of course! At that time, they had accumulated $3.2M of debt....with no signs of slowing down.

This family had a lot of options on the table to right the ship (i.e. close the income gap and hopefully start paying off their debt):

• Increase their annual income.

• Trim expenses to prioritize the items that add the most value to their lives.

• Actually stick to their budget.

• Make sacrifices.

• Live with more humility.

Today, I bring you an update. A lot has changed for this family, financially and otherwise. Curious if they were able to right the ship? Well, here goes! Their annual income increased from $270,000 to $490,000.....huge win! Unfortunately, they somehow managed to increase their annual household expenses from $360,000 to $670,000.....yikes! The net impact of these decisions is a negative $180,000 per year.....oh boy! As you can probably guess, this has led to a disastrous situation on the debt front. If $3.2M of debt wasn't bad enough before, it's now more than $3.6M.

What do you think? Is there any way out of this mess? What would it take for this family to get their crap together and finally face the consequences of their continued indiscretions? Do they need a proverbial slap in the face?

I typically don't name names, but today I will. Want to know who this family is? It's the U.S. government. It's the country we call home. I took the actual numbers and adjusted them to contextually make sense through the lens of a normal family. The ratios are the same. Their $490,000 household income is $4.9 trillion. The $670,000 of household expenses is $6.7 trillion. This results in an annual shortfall of $180,000, or $1.8 trillion. Lastly, the $3.6M of debt is $36 trillion!

It's so easy to gloss over these massive numbers. It's hard to wrap our heads around them. We can't even make contextual sense of a billion, never mind a trillion. But through this lens of a family making nearly a half million dollars per year, failing to meet its monthly needs, and racking up more than $3M of debt along the way......it sounds insane!

Financial irresponsibility is all around us. Nobody is telling us to do it right and get it right. We have wholesale cultural permission to act impulsively, get what we want now, and kick the can of consequences down the road for another day. I think you deserve better than that. That's no way to live. Fortunately, you don't have to. A better reality exists, but it's on the other side of a lot of intentionality, humility, and discipline.

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But Not All the Fun Things

One of my favorite things is receiving random voice memos from Meaning Over Money co-founder Cole Netten. Cole is known for sending long rants that offer a combination of podcast ideas, requests for guidance, or just a general release valve to the madness of our culture around money.

Yesterday's voice memo was a podcast idea. He doesn't know it yet, but it triggered the opposite content idea than originally intended. He highlighted how I often say that it's not the coffee (or other small purchases) that's killing people. Rather, we're burying our financial lives through a handful of key massive decisions. Yesterday's voice memo was to point out (and rant about) how the price of coffee shop coffee is getting so ridiculous that maybe the coffees ARE killing people. Considering I own a coffee company, I was deeply offended by his remarks (haha!!).

He does make a great point; coffees aren't cheap these days! It's not uncommon for people to drop $6-$9 on a single coffee drink. That's the new normal. However, I think it does the topic a disservice when we look at the price of a single transaction in our day and scapegoat it as THE reason we face financial tension.

We can (and should) have fun things, but we can't have ALL the fun things. The coffee alone isn't killing us. We can choose to have the coffee. The clothes alone aren't killing us. We can choose to have the clothes. The problem arises when we decide we want ALL the fun things.

I just had this conversation with a client the other day (and I appreciate them for allowing me to share this on the blog!). One spouse blamed the other spouse for the Starbucks runs killing them. The other spouse accused the first spouse of gas station snack pit stops as the financial culprit. The truth is, neither of those things is what's killing them. Their problem is they are trying to have ALL the fun things, including:

• Daily coffees

• Daily gas station snack runs

• Lots of clothes

• Drinks with friends

• Frequent dining out

• Weekly massages

• Monthly botox

• Frequent phone upgrades

• Country club membership

• 3-4 sports/activities for each kid

• High-end haircuts

• Continuous gun purchases

It's death by a thousand cuts. There's nothing wrong with any of these items IF they add value to their life and are consistent with their values. But for some reason, they've decided they deserve ALL the fun things....and it's crushing their finances (and their marriage).

Where does contentment come into the picture? What about saving/investing? Giving isn't even on the radar. Humility is desperately needed. It's an arms race of more, an unwinnable battle. They are in the thick of it; one day, they will likely wake up and face the harsh consequences of their decisions.

It's okay to enjoy that coffee, or that meal, or that massage. None of these items, in a vacuum, will kill you. You can have fun things. But you can't have ALL the fun things. Discernment is a powerful tool. I hope you feel confident in yours this week.

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Micro Losses, Macro Wins

One of my clients felt frustrated. When I asked her how the most recent monthly budget went, she confessed that she didn't do so hot; she overshot four categories. Curious about this, I told her I would check her numbers quickly. Here's what I found. As explained, she overspent on four different categories in the amounts of $27, $33, $40, and $41.

Sure, that's not ideal. The objective is to spend what we budget, no more and no less. So when she whiffed on four categories, that wasn't the plan. However, she was missing the bigger picture. Upon review, I noticed that while she whiffed on those four categories, her entire budget was within about $25 of her target. That's awesome! In other words, she may have had some micro losses on specific categories, but she was a winner on the macro level.

To prove a point, I checked my own budget. While she missed four categories on her budget, Sarah and I overspent on 13. Yes, 13 separate categories were a miss on our budget. It happens. Life happens. But we rarely get bent out of shape over it. Instead of dwelling on micro losses, we focus on the macro. In the case of our total budget, we were within $100 of the target......which is a win!

Don't psych yourself up over micro losses. So what if you overspent on household goods by $40? So what if you spent $30 more on kids than you had intended? Sure, we should always strive to do better, and we will hopefully do better next month. However, focus on the big picture. It's never going to be perfect. You'll screw up. Life will happen. Unforeseen expenses will pop up. That's called being human.

If we give ourselves permission to experience micro losses, we'll be more inclined to give ourselves grace, focus on the big picture, and achieve what matters more: macro wins!

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Taking Timing Off the Table

Have you ever stressed out about the timing of your finances? For instance, your mortgage payment is about to get pulled from your account, and you have a paycheck also arriving soon, and you're crossing your fingers and toes, hoping the paycheck happens first. Sound familiar? That's a tremendously stressful endeavor, and millions of Americans deal with it monthly....or even weekly!

Confession: I don't know what day any of my expenses get pulled from my account.....not one. Sounds pretty irresponsible for someone who helps others get more intentional with finances, right? One of the principles I talk about in my coaching is taking timing off the table.

I teach people to look at life through the lens of calendar months. This month is this month, and nothing else matters until this month is over. We know how much money we'll make this month, and if we're intentional, we'll know how much money will be leaving our account (spend/save/give). As long as those numbers align, we shouldn't have to worry.

Here's where people get tripped up. Our income isn't in our account on day one; it arrives in various increments as the month progresses. This is the wrench that messes us all up. Here's my little hack to not only keep the train on the tracks, but make your financial life so much simpler. Start with a cushion, any cushion. When the month begins, we need a chunk of money in our checking account. $1,000, $3,000, $5,000, $10,000.....I don't care what number you choose, as long as it's enough to prevent you from feeling stressed about timing.

Next, we need intentionality. Once we know how much money is coming in this month, we need a plan for ALL of it. We can spend it, save it, or give it. If we're going to make $5,000, then we need a plan to spend/save/give ALL $5,000. If we're going to make $15,000, then we need to spend/save/give ALL $15,000. We are NOT spending the cushion money; that's just a cushion. We are only spending the money coming in this month. Money in, money out. Once the month is done, we should end with as much cash as we started with.....which becomes the cushion for the following month.

Here's a simple illustration, using $5,000 as the starting cushion and an $8,000 monthly income:

Beginning Monthly Balance: $5,000

Monthly Income: $8,000

Planned Spend/Save/Give: -$8,000

Ending Monthly Balance: $5,000

If we play this out for 20 years, you should wake up on the first of the month 20 years from now with $5,000 in your checking account. You took timing off the table, and life feels a lot less stressful.

This obviously isn't a catch-all for all that ails us financially, but for many families, it can be a game-changer. If we shift our mindset to this way of thinking, timing is never an issue again. Instead, we can stop dwelling on money and simply live a meaningful life.

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What Gets Measured, Part 2

Last week, I published a piece about the importance of measuring the things we want to accomplish. After all, "what gets measured gets done." I framed the post through the lens of my newfound discovery that I walk far less than I thought. So, when my wife purchased a walking pad, I decided to do something about it.

In the world of "what gets measured gets done," how we measure is where the rubber meets the road. If we can't find a simple and effective way to measure, we won't. And if we won't, ____ doesn't get accomplished. This is a crucial concept I discuss with my coaching clients. It's imperative to find easy ways to measure what needs to be measured. Anything else will result in inevitable failure.

In the case of my walking, I luckily have a world-class tool at my fingertips. In fact, we all do. The built-in Health app on the iPhone is an amazingly simple and powerful tool for measuring many different aspects of our lives. It's a bit scary, but this app has measured my walking for the better part of a decade. I can see the data in black and white.

Given how well the data is measured, it's created more clarity and motivation for me. I consciously think about my walking now. Instead of being completely passive and out of mind, it's at the forefront. This has resulted in some interesting (and intentional) behaviors:

• While waiting for my flight on Saturday afternoon, I paced back and forth through the terminal while on a Northern Vessel call with TJ.

• Knowing I'd be sitting behind a desk all day on Sunday, I got a few thousand steps on the hotel treadmill early in the morning.

• Since I did, in fact, sit behind a desk all day and didn't get to my new hotel until 10:30 PM that night, I still needed to rip out another 3,000 steps before bed. Unfortunately, the hotel's treadmill was broken. I improvised, pacing the hotel like a creepy stalker while talking to a friend on the phone.

What gets measured gets done! Want to see what that looks like for this silly little endeavor?

Boom! I went from 3,000 steps per day to 12,000 practically overnight. Part of why I've been preliminarily successful is the tool's strength. Look how clean and visual the data is. I'd be lying if I said it wasn't making a difference.

Finances are the same way. We need simple yet powerful tools. If you're looking to budget, EveryDollar Premium is hands down the best budgeting app on the market. I'm not Dave Ramsey fan (to put it lightly), but truth is truth. They created an ingenious tool, and it's 100% worth checking out. It must be the paid version, though. The free version, requiring manual entry, is brutal to use. This tool changes lives.

CapitalOne's 360 Performance Savings accounts are a fantastic tool to facilitate and track sinking funds.

CashApp is easily the best tool to house a single spending category, like personal spending, groceries, or dining out.

What gets measured gets done, and the right tools can be the make or break. What tools add value to your finances?

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When Nothing is Everything

My client was frustrated.....borderline fuming. After two frustrating months to end 2024, they felt stuck and defeated. Expenses piled up, the budget got shredded, and they didn't make nearly as much progress on their debt as hoped. They had big goals, but ultimately, the goals fizzled at the hands of their harsh financial reality.

I was so proud of them and happy for them! In my opinion, they had an amazing few months! Months worth celebrating! Months worth remembering. Months that will eventually be looked back upon on as the turning point to everything.

What's the disconnect? Their definition of a win was paying off debt and having everything go right. My definition of a win was how they approached the situation and navigated it when everything went wrong.

In years past, they would regularly fall into the credit card debt cycle at the slightest presence of adversity. Their finances would run away from them, they would quickly slide the credit card, and kick the can down the road to fight another day. After battling to remedy the problem for the next several tension-induced months, they would repeat the cycle. All the while, they would wonder where their money is going and why they can't get their crap together.

Enter November and December of 2024. They had big plans for debt paydowns and moving the needle in their finances. Then, as life tends to do, crap happens. An emergency vet bill, the car breaks down, an unexpected family trip, a surprise activity expense for their kids. One expense piled onto the last. Suddenly, their perfectly crafted budget eroded around them.

I'm not painting the best picture, am I? This is where it gets good. Since they had an actual plan, created with unity, implemented with intentionality, and entered the month with clear visibility, they saw the twists and turns as they came. While it wasn't ideal to alter their budget to accommodate the crap, they were in control of the budget, not the other way around. For the first time ever (20+ years!!!), they carefully pivoted, took care of their business, and survived the financial onslaught. Even more impressive, they managed to do so without tapping into the credit cards. Yeah, they endured all the crap that life had to offer WITHOUT falling into the credit card death spiral. Massive win!!!

If they compare where they ended up with what they originally planned on doing, it would appear they accomplished nothing. However, sometimes nothing is everything. In their case, this seemingly disastrous month was the biggest win of them all. Now that they know they can thoughtfully and intentionally handle the tough stuff without resorting to debt and old habits, they can accomplish anything together.

This is where they begin to cook. This is where their life changes forever. This is where the rubber meets the road.

Sometimes, nothing is everything.

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Wipe Off the Mirror

Today's piece is more technical than usual, but it bears consideration. Let's say you're having a tough financial month. Expenses are running higher than you anticipated, unforeseen situations pop up, and/or you elect to make a purchase that wasn't originally budgeted. You'll inevitably exceed your income, and something must be done.

The worldly way is to simply throw it on the credit card and deal with it sometime in the future. No bueno! For those of you who don't play Russian Roulette with credit cards, a solution must be found. Enter the emergency fund. Emergency funds are great for the times when expenses snowball on us. Most people house their emergency funds in a savings account directly tied to their primary checking account.

Therefore, when the crazy months arise and we need relief, we can click a few buttons, and that money is available for use. How we choose to frame it in our financial life is where the rubber meets the road, though. One option is to bring the emergency fund cash into our account and silently use it to offset expenses behind the scenes. We receive the needed relief, our needs are met, and we can move on. It's all good, right? Wrong!

To show why this is an unhealthy approach, please allow me to show you the alternative. Let's say we're having the same crappy month, and we need to pull $2,000 from our emergency fund. Let's assume our car breaks down, and it's one of those oh-crap-what-do-we-do moments with our mechanic. We immediately know our budget will be $2,000 short, and we can bridge the gap with our emergency fund. Instead of allowing these transactions to happen behind the scenes, we do two important things:

1. We add the $2,000 into our budget as income. In my budget, I call this income line item "From E-Fund."

2. We add the unwanted and unexpected expenses to our budget. In this case, we allocate an extra $2,000 to the car maintenance category.

What's the difference? In the first scenario, everything looks good in our budget. It appears we make what we always make, and our expenses are normal (i.e. artificially low). That doesn't reflect reality.

Adding our emergency fund proceeds and associated expenses into our budget forces us to look in the mirror. Or, to be more specific, it forces us to wipe off the mirror to see more clearly. This transparency is the secret to accountability, growth, and ownership. When we can digest our situation at face value, we can face reality on reality's terms. This makes all the difference in the world!

That's why I repeatedly say we need to account for all income coming in, and ensure every dollar finds a home. The consequences are very real. People who properly account for their emergency fund use are far less likely to dip into it than people who facilitate it behind the scenes.

Wipe off that mirror! The more real you can be with yourself, the better you'll be......and you deserve better.

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It’s Not Gonna Kill You

Never underestimate a person’s ability to justify overspending. Despite all the pitfalls and perils of overshooting our budget, as well as the warning signs as we approach the end of our rope, we still find ways to work our way into irresponsible decisions.

There’s one specific example that gets thrown in my face as an example of why we must overlook the boundaries and simply act. “Travis, what if you need to buy groceries but are out of grocery money? Just not buy groceries?!?!”

Yes, correct. That’s exactly what I’m suggesting. It’s not gonna kill you. In 99% of situations, there’s enough collective food in the pantry, fridge, and freezer to make it through. It won’t be fun. It won’t be convenient. And it might not be tasty. But it’s absolutely a feasible approach to the situation.

I can tell you from experience that this approach sucks, but is effective. It’s effective for a few reasons. First, it teaches discipline. If there’s one area we’ll want to bend the rules, it’s this. If we draw a line in the sand here, we establish a principle and willpower that carries deeper and broader.

Also, since the consequences of our failed budget or failed execution completely sucks, we incentivize ourselves to learn from the experience and do better next time.

Third, we learn grit. We do hard things because we’ve done hard things. And we do them together. We persevere, fight for the cause, and endeavor to do what it takes to meet our goals.

I’m so grateful for those crappy months when Sarah and I screwed up our grocery budget so royally that we had to white-knuckle pantry dive for a few weeks. It’s happened more than once, and each time was as painful as the last. But it was so, so good for us. The habits and principles it set in our life are priceless, and are partially responsible for the life we have today.

It’s not gonna kill you.