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.

All Of It

Are you human? Good, I was hoping so. This post is for all the humans out there. We humans have a knack for playing little tricks on ourselves to get what we want. In today's piece, I'm going to discuss "extra." Specifically, extra income. We're not good at managing extra income. Tax refunds, bonuses, extra paychecks, commissions, gifts, etc. We love treating these irregular cash inflows as extra, and by extra, I mean we don't have to be responsible with it.

You know what happens to extra, right? Of course you do! For most of us humans, we waste it. I use the term waste not as a reference for spending on wants, but rather as an indictment of our lack of intentionality.

I'll use the example of a typical family. They know when their paychecks arrive each month. That income, whether budgeted or not, is largely allocated for life's various expenses. It's rhythmic. It's normal. But the extra? If we receive extra income, the typical outcome is to mentally and emotionally carve it out from our normal income and impulsively spend it. We forget context, goals, and priorities. Instead, we just act. It's a little Jedi mind trick we play on ourselves. We convince ourselves this income doesn't count, so we just willfully ship it wherever our emotions tell us to.

Here's the alternative. I'm a big believer that all income is created equal. Every penny that comes in, whether a normal paycheck, bonus, tax refund, or any other surprise we might receive, should be woven into the plan.

I recently met with a client who is a textbook version of what it looks like to get it right. They received an inheritance. As soon as they knew how much it would be, it went into their budget alongside their normal income. His income, her income, and inheritance. One big pot of money. It was just like every other month, except this month had a lot more in the pot.

They negotiated where this month's income would go, including the extra. A handful of categories received some extra love due to this larger income. Their decisions were proactive, measured, made in context with the larger situation, and aligned with their goals and values. Once they negotiated the plan, the next step was easy (and hard): They executed the plan. When the money arrived, they did exactly as planned. Money was physically moved into each respective destination, ensuring they honored their past selves' plans. Perfect.

It might sound like I'm splitting hairs with this one, but trust me, it makes all the difference in the world! When we allow all income to be created equal and take responsibility for it as such, we make different decisions. Better decisions. I could tell they had a ton of peace and unity with their plan. Nothing was impulsive. Every decision made sense. It moved them closer to their aspirations.

This is a model to follow. Regardless of where the income is coming from, treat the same as the rest. It can make all the difference in the world.

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Normalizing Your Normal

I recently broke the news to a family that spending $5,000/kid on Christmas presents doesn't jive with their family's finances. They have five kids…..

They were appalled by my audacity to suggest this amount of money is unreasonable. "That's a normal amount to spend," proclaimed the wife. My response: "Just because it's your normal doesn't make it reasonable. You're the one who normalized your normal."

"No, what we do is totally reasonable and is a completely normal amount to spend." Then, much to my delight, she suggested I blog about it to prove just how normal it is. I'll be looking forward to your collective responses.

This brings up a broader point, though. When we refer to something as "normal," we're glossing over the question of whether it's right. Normal does not equal right. We can (and often do) normalize bad behavior:

• It's normal to go tens of thousands of dollars into student loan debt.

• It's normal to live at or above our financial means.

• It's normal to give away very little, spending all of our resources on our own desires.

• It’s normal to live without an emergency fund.

• It's normal to stay in jobs that make us perpetually miserable.

Just because something is normal, it doesn't make it right. Further, we tend to live in little bubbles, surrounding ourselves with people who practice the same habits, values, and rituals we do—an echo chamber of sorts. I agree; there is a sub-culture of people inclined to spend $5,000/kid on Christmas. It's normal within that group of people because they collectively normalized it.

This blog is a different version of that. I'm trying to normalize meaning over money. I'm trying to normalize the pursuit of work that matters. I'm trying to normalize ridiculous levels of generosity. I’m trying to normalize intentionality with our finances. I'm trying to normalize a lived experience far more rewarding and fulfilling than fantasizing about retiring into a life of leisure.

Here’s my call to action today: Question what you perceive as normal. First, is your definition of "normal" normal? Second, if so, should it be? Perhaps it's time to turn normal on its head, draw a line in the sand, and normalize something better. I'll leave it open as to what this applies to in your life, but you probably already know the answer.

Side note: $200. That's how much Sarah and I will spend on each of our two kids for Christmas gifts. That's "normal" for us.

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I’ll Have One Christmas, Hold the Guilt

'Tis the season! The lights are going up, the movies are coming out, the weather is turning cold, and my Chicago Bears are melting down into season-ending turmoil. It can only mean one thing: Christmas is coming!

I absolutely love Christmas, but do you know what I don't love? Financial stress, unforeseen debt, and guilt. This is the annual season where millions of families will throw away their measure and discretion for just one more taste of the holiday spirit. Between the decorations, travel, gifts, food, and hosting, it's not uncommon for families to rack up thousands of dollars of expenses (often with debt).

Unfortunately, these expenses are often unbudgeted. They are impulsive, reactionary, and unplanned. But the magic of the season is intoxicating, so we just go along with it. Come early January, it's not uncommon for people to feel significant stress, tension, resentment, and guilt. By the time the Christmas spirit lifts, we're left with a nasty hangover. Have you ever been there before?

Multiple times in the last week, I've talked to families equally anxious as they are excited for the holiday season. On the one hand, they can't wait to share those special moments with the kids, but on the other hand, are dreading the seemingly unavoidable consequences.

I think you deserve better than the most wonderful season of the year to rob you of your peace, freedom, and sanity. You deserve to experience all the joy, without any of the guilt. So today, I'm going to give you a few ideas on how to do Christmas differently:

• Remember that Christmas joy is not derived from money, stuff, or status. Joy is joy.....period.

• Go into the season with a plan. If you're the budgeting type (and I hope you are!), ensure you have money allocated for each component of the season: gifts, travel, decor, food, hosting, etc. Name each and put a dollar figure on them.

• Speaking of budgeting for gifts, make a list of every person you want to buy a gift for. Then, assign a dollar amount to that person. Shop with boundaries.

• Commit to NOT using debt. There's no need to whip out the credit card. I know it's tempting, as it always is, but there's so much peace that comes from knowing everything you paid for is actually paid for.

• Follow the plan. If you said you would spend $500 on gifts, spend $500 on gifts. Don't spend $700, $800, or $1,200. Once you commit, commit. I don't care what the number is for any category, but you must honor yourself by honoring past you's decisions.

• Remember again that money, stuff, and status don't bring joy.

• Slow down your schedule, not speed it up. Embrace the time with your loved ones. Savor it. Don't cram as much in as possible.

• Remember the reason for the season. In our house, that's Jesus.

I hope this is the beginning of a beautiful holiday season for you and your family. It's been a crazy year. Enjoy this final chapter of it.

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Trust the Process

Whenever someone is talking about how a loved one needs to improve their finances, they often blurt out statements such as, "They just need to pay off their debt," "They should just save more money, or "They just need to stop spending."

Those statements make a generalized assumption that there is some magical switch that can just be flipped, like a toy doll. The doll stands motionless until you flip the little switch on its back, then it comes alive. Unfortunately (or fortunately), that's not how humans work. It's not as simple as "just pay off debt."

In my now-well-tested opinion, there's not one step to getting right with money. It's not as simple as "just do _____." Rather, there are three critical steps, each as important as the next:

1. Gain awareness

2. Gain control

3. Gain traction

The first step to getting right with our money is to develop an awareness of where we stand. We need to understand the lay of the land, clearly see our current situation, and gain a firm grasp on our current reality. It's the hard look in the mirror.

Once we've gained an awareness of our reality, we can begin to gain control. Slowly but surely, we shift from reactive to proactive. From being a victim of our impulses to the author of the story. We learn the art of telling our money what to do, and then doing it.

Once we've gained control, that's when we can begin to gain traction. When we become the conductor of the symphony, we get to decide what goes where and when. That's when this entire thing unlocks. We earn the right to start making progress in our finances and move the needle in that area of our lives. We get to prioritize and focus, then watch the momentum actually build.

We can't just skip to gaining traction. Traction doesn't happen on accident. First, we need awareness, then control, then the much sought-after traction. Don't put the cart in front of the horse; one step at a time. It may seem like things are moving slowly at first, but then, it accelerates much faster than you could have imagined. Trust the process!

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Opening Eyes, Escaping Traps

I'm going to start today's post with a correction. In yesterday's piece, I shared the story of a young couple who wanted to buy a car without debt. I explained how they planned to buy a $20,000 car by saving $500/month for 20 months. Blog reader Ryan pointed out an error, as $500 x 20 = only $10,000. That was a fat finger on my part. This couple planned to save $1,000/month for 20 months. It required them to significantly pare back their budget and sacrifice, but they did it and paid cash! **I’ve since corrected this error on the website.

On the heels of yesterday's post, I received some expected pushback. Specifically, I was accused of exaggerating the monthly car payment this couple would need if they decided to buy a new car. The exact words were, "A $580 car payment seems over the top. That doesn't even seem like a realistic number. Car payments aren't that high."

One of my favorite aspects of my podcasting and blogging is the opportunity to share a broader perspective with people. Understandably, most people's context regarding many of these topics is singular: theirs. They know their life, and it's hard to see things through the lens of other people's situations. That's why some people think our economy is fantastic, and others believe it's trash. We don't know what we don't know. We see the world through our one-of-one reality.

I'm grateful that in my work, I get to walk alongside hundreds of people and try to put myself in their shoes. With that preface in mind, back to the car payment. Some see a $580 car payment and think that sounds outrageous. I see a $580 car payment and now think to myself, "Oh, theirs isn't so bad." I remember when I saw my first $1,000 car payment. It was startling. Now, I expect it. Further, I now regularly see $1,500 car payments. It's bonkers!

I often get accused of beating this car topic into the ground......guilty as charged! I believe cars are the single biggestcontributor to our modern-day financial struggles. Our cars are literally killing our finances. Here are a few stats to show where we're at (second quarter 2024 data):

• The average new car loan is now $41,000

• The average new car loan term is 68 months (more than 5.5 years)

• The average new car loan interest rate is 6.8%

• The average new car loan payment is $734/month!!!!

• The average new car insurance payment is $194/month!!

• That means, on average, the monthly cost for a new vehicle in America is $928/month.

It's an epidemic, but it gets worse. Since cars depreciate in value by about 15% per year, and we're extending the loan terms out longer and longer, nearly 1/4 of vehicle trade-ins have negative equity (meaning people owed more on the car than it was worth). This causes people to perpetually borrow more than their newly purchased car even costs.

This trap is killing millions of families! At least 25% of people reading this are probably experiencing high monthly car payments. The opportunity cost of those payments is tremendous, and I have enormous empathy for everyone in that situation.

But we don't have to play these games! It's 100% possible to escape the car loan debt cycle. It takes sacrifice, humility, persistence, and dedication. But you can absolutely do it!

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They Ate the Elephant

A young couple scheduled a coaching consultation with me. They had questions. They needed wisdom. Here was their dilemma: They needed to buy a replacement vehicle soon, but they didn't have any money. Everyone in their lives told them to get a car loan. Their parents told them. Their friends told them. Their co-workers told them. Their neighbors told them. The cultural undercurrent was clear: they should just get a big car loan and quickly buy the vehicle they want. Yet, all the while, this idea didn't sit well with them. They had this wild inclination that a big, fat car payment would somehow hinder their ability to live a free and meaningful life. Thus, they scheduled a meeting with me.

The car they were considering cost $35,000 (new). A six-year loan would cost around $580/month. This felt heavy, and understandably so. My first question was why that particular vehicle. They talked about reliability, longevity, and common practice. After reading some reviews and discussing alternative options, we concluded we could find a suitable alternative in the $20,000 range. It was a different model, slightly used, with some miles on it. That step alone was a game-changer.

Next, we needed to figure out how to pay for it. They could easily go to the bank and get a loan, but they wanted to avoid debt (and perpetual payments) if possible. They had very little cash, so $20,000 still seemed unattainable. There's an expression that goes something like this: "There's only one way to eat an elephant: one bite at a time." Thus, we needed a plan. Given their existing car situation, we decided they could push this decision off for upwards of two years. Therefore, they set a plan to pare down their budget and save $1,000/month for 20 months. If they could do that, they would have enough cash set aside within two years to buy the vehicle.

This still felt insurmountable, but they were crazy enough to try. It took intentionality and persistence, but they ended up doing it in 19 months. $20,000 of cash in hand! They eventually decided to save for a few more months and ended up with about $22,000.

You know what they did next? They did exactly what everyone else told them they shouldn't do. They paid cash for a car. A car they could afford. A car that would suit their needs while also allowing them to live a free life. They ate the elephant!

Don't fall for the trap. There are better ways to live out our finances. Harder ways, but better ways. Patience. Delayed gratification. Humility. This young couple is so glad they took the path less traveled. They are living for meaning first, and it's a joy to watch. You deserve the same!

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Growing Into It, Not Out of It

Over the years, I've come to understand a universal understanding about budgeting: It's something you do when money is tight, and then eventually grow out of it. It manifests through various comments:

"My kid doesn't make much; they need to budget."

"We make a lot more than we used to, so we stopped budgeting."

"I make plenty of money now, so budgeting is pointless."

I probably hear a variation of this comment at least once per week. To me, it's one of the biggest misunderstandings about budgeting. Actually, I do think income and the need for budgeting are correlated......but the opposite of conventional wisdom. The more money someone makes, the greater the need to budget.

I'll use two examples to illustrate this point:

• Family A: This family has a limited income. Finances are tight, and most of their income goes toward needs and debt. When they budget, the primary objective is to ensure there's enough income to meet these basic needs.

• Family B: This family has a stout income. Their needs are met, and a bunch of discretionary income remains. They don't "need" to budget.....they are fine. However, without a budget, there's a high likelihood that they squander their opportunity to give, save, invest, and spend on things that add value. Without a budget, their impulses and lack of intentionality will waste much of their upside. But with a budget, the sky's the limit.

Family A has a narrower range of outcomes. During this season of life, money is going to feel tight. The difference between budgeting and not budgeting ranges from barely making ends meet (and possibly accruing credit card debt) to making ends meet with a bit of discretionary income left over.

Family B's range of outcomes is like the Grand Canyon. Without a budget, they can essentially squander all of their upside and somehow manage to live month-to-month, feeling significant financial tension every step of the way (this is common). With a budget, they have the power to harness this beautiful financial blessing for so much good. They can give generously, save for future wants/needs, spend money on things that actually add value, and invest meaningfully and intentionally.

It's sad, but LOTS of Family B's will squander their opportunity. I've had the privilege of working with many of them, and when they understand this principle, it's game over! Here's one example. This family had generated a fantastic income for over a decade. Yet, over that time, they'd experienced minimal positive momentum. They didn't have much saved, they gave practically nothing, and their investment portfolio was significantly behind schedule.

Then came the budget. They pushed back against budgeting because they "make too much to need one." Eventually, though, they trusted me enough to try. Fast forward just a few years, and they were giving away more than 20% of their income, had adequate savings, invested in creating memories, and built a million-dollar portfolio......which triggered a desire to ramp up their giving even more. All because of a simple budget.

Budgets change everything! ESPECIALLY if you "don't need one."

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But What Will You Give Up?

One of my friends reached out, wanting my input about a big decision he and his wife are considering. They own a house that roughly fits their needs, but house fever is setting in. In a weak moment, they cracked the door open and started looking at houses. Surprise, surprise.....they found an amazing one! Fortunately, though, they are taking a measured approach to the decision; hence, they sought my feedback.

I asked for a handful of numbers to understand the lay of the land. What's the current house worth? What's the current mortgage balance? What's the breakdown of the current mortgage payment? What does the new house cost? After a few simple calculations, I derived one critically important number: $1,700. That's how much their monthly payment would increase if they green-lit this decision. There are many other variables worth considering, such as furnishing the house, higher utility bills, additional maintenance considerations, etc. However, that $1,700 number is vitally important.

We talked about a few of these nuances before I asked THE most important question: "But what will you give up?" In other words, where will this extra $1,700/month come from? Oh yeah, I also added one caveat: "And you can't say, 'We'll just make more income.'" He laughed and said he was about ready to say, "We'll just make more income."

"More income" is a terrible answer to this type of question, as it just stacks additional pressure and tension on us. While this new house might increase their standard of living, taking the just-earn-more-money approach will inevitably lower their quality of life.

So, back to the real question. What will you give up? Buying this house will require them to reallocate $1,700/month away from one or more categories. But which ones? Their giving? Their saving? Their investing? Their fun? All of these have substantive consequences. Buying this house isn't inherantly bad, but they must be clear and honest with themselves first.

That's why we must answer this question when making big financial decisions. There's no such thing as a free lunch. Every time we create a financial obligation in our lives, that money has to come from somewhere. We ought to think about that before making such decisions.

Ultimately, they couldn't think of a good answer to that question. They loved the house, but not give-up-$1,700-of-other-things-we-care-about love. Thus, they passed. Good call; very good call. I suspect they will thank their former selves in due time.

Whatever decision you have on your plate that involves the increase of financial obligations, always ask yourself, "But what will I give up?" Your answer will be telling.

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