My Blog

Flex is the best lifestyle choice for all. 

It seems that everyone is on some sort of mission when it comes to money. Most of these missions require hardship in the form of working too much, working at jobs they hate, missing special occasions, feeling stressed out, and drinking a lot to cope with the demands of meeting your goals by a specific time.

Author, Annie Auerbach, defines flex as a manifesto for working and living on your terms.

The traditional way of doing things isn’t working for most anymore. People are spending too much time indoors. Our bodies ache because of all the sitting. To escape the rate race most have turned to pursue some sort of Financial Independence (FI). No matter which of the 5 FI’s you choose, you are sacrificing something to get there. Oftentimes it is your health. 

Here are the FI’s that people are striving for to achieve freedom. 

Lean FI

Being able to pay for all essentials should you lose your income, but not fund vacations and entertainment. Essentials include health care, home, food, utilities, and transportation.

Fat FI

This approach takes the longest to achieve because you are trying to live a grander lifestyle than what you are currently living once you stop working. You want more in retirement. 

Barista FI

Originated by the idea that one can qualify for health care benefits by working part-time at Starbucks. This FI is for those who don’t have enough to completely retire but want to stop working at their stressful job full-time. They have a good amount saved and invested to not feel the pressure to make a certain amount of money. However, they still need to work.

Coast FI 

One has to invest early and often so that by the time they reach a certain age they can stop investing and let it grow via compound interest. 

Regular FI

Having the income streams and funds to sustain one’s lifestyle should one decide to stop working. Enough money to not have to give anything up or ever work again. This is what a lot of people are pursuing. 

Of these 5, my two favorites are Barista FI and Coast FI. I believe that to stay healthy, you need to work. We need to keep building our brain muscles for life. Use it or lose it. 

Living to a certain age is not guaranteed. How many times do we hear that people wait until retirement to do what they wanted to do and then die suddenly? Or they get sick and are limited in their abilities. That is my biggest worry with pursuing FI. How much energy are you sacrificing on reaching FI that you put everything else on the backburner? 

Let’s go back to Flex. 

Focusing on flex allows you to focus on the life that you and your family want now.

When I look back at my own life, I believe that my husband and I have lived a flex life. We had 9-5’s for a long time, he still does because he loves his job. Even when we worked these jobs. We only accepted jobs that aligned with our values: our children, our relationship, and time. We always got out early which gave us the afternoon to spend time together and have our children enrolled in extracurricular activities. We also had the flexibility to take time off often to volunteer at our kid’s school and attend school events for them as well. 

He will continue working at his job until he is eligible to receive his full pension from the school district. That is his flex. He is looking forward to that. That will also include full medical insurance for both of us for life. 

I decided that I wanted a flexible life following the pandemic. I had unfulfilled career dreams. We reached a point where we no longer had to pay for childcare. I had been saving in my 401k for over 10 years, so I had a good cushion. We also had a fully-funded emergency fund in place and a bit of extra savings for home repairs. Most importantly we had no debt, and our cars were in good condition. 

Flex includes work, but you’re working on what you want. It can be a high-stress job, but it doesn’t feel like work if it is something that you enjoy. Flex is being in control of your time. It also is having time to do the other things that you love. Flex is working the job that best suits your personal needs, whether that is completely independent or something that involves interacting with others.

The goal with Flex is to not worry about your retirement number. How much do you need to save to retire? That doesn’t matter in a flex lifestyle because you will be working a job that you never want to quit. Your lifestyle will allow you to take breaks when needed and come back when you feel refreshed. You can keep designing your job to meet your lifestyle preferences as you age, but you keep working because it gives you a purpose and you have the flexibility to do anything you want to do so there is no reason to quit. 

Stop focusing on numbers. Live a well-balanced life. Save. Travel. Work. Invest in yourself, your home, and your relationships. 

If you do all of this consistently you will live well at any age.

Resource

The 5 Types of Financial Independence

This is a tool available to all social classes, but only the rich seem to take advantage and play the game. 

Those that still use cash and debit cards to pay for goods are missing out on tax-free rewards like cash that would positively impact their financial situation. 

I’m not encouraging people to go and apply to the first offer they see. Those usually are the worst. Riddled with high interest and no rewards except for the free t-shirt or koozie.  

When people have had bad experiences with credit cards, they may not want to ever have one again. Perhaps they cosigned for someone that got into debt and didn’t pay it off, so the debt fell on them. Maybe they thought it would be good to buy furniture and do home upgrades using a credit card. Now they are paying a mortgage and high credit card bills every month leaving them stressed out instead of enjoying their home. 

We all have made some financial mistake or another. The key is to learn from it and focus on being better. It is no different with credit cards. If someone has had bad, high-interest debt in the past it doesn’t mean that they cannot become responsible credit card users as they transition to being good with money.

Using credit cards responsibly

1. Less is more. Carry only 1 or two cards. One major card to charge most items on and carry another card to a place that you shop at a lot like a grocery store or clothing store to get specific rewards to that store.
2. Pay your card off monthly. Not paying off your card monthly defeats the purpose of getting rewards. It does not balance out. You end up losing. 
3. Do not open credit cards if you currently have high-interest debt. Pay off your debt first. Once you pay off your debt, follow a budget for a few months while staying out of debt. Take note of what you spend most of your money on. Find a credit card that will meet your spending needs best. For example, if you spend a lot of money on groceries then find a card that gives back rewards for groceries.
4. Don’t let fees scare you. The rewards outweigh the costs.  

Why I love credit cards

Rewards are tax-free. You can cash out rewards without worrying about being taxed on income at tax time. There have been attempts to pass laws that would tax one on rewards they receive from credit cards, but so far that has not happened. Take advantage of tax-free rewards before that changes. 

Cash-out to invest. You can cash out rewards and invest in your Roth IRA or save up to invest in other assets.

Use cash rewards for fun experiences that you otherwise may not be able to afford like plane tickets, restaurant meals, and gift cards. Think of it as a sinking fund for fun and giving. 

Don’t start off wrong

Reward cards usually have a promotion to get you to sign with them. It comes in the form of thousands of points, which in some cases is equivalent to over $500. To earn those points, you must spend a certain amount of money within a short amount of time. Do not overspend just to meet initial spending requirements. 

The amount is not a lot unless you are single. Then it may seem a bit daunting. However, I know single people that have been able to meet the spending requirement by asking family and friends if they could pay for large expenses they had coming up. They would pay for the purchase and then would be reimbursed promptly.

___

Stop using cash and debit cards to fund your life. They are keeping you poor. Only use cash and debit cards if you find that you are unable to pay off your credit cards monthly and if you have bad debt. Learn to spend less than you earn before trying to use credit cards again. 

Do it the right way. It’s worth it.

*Resources

How credit card companies reward the rich and punish the rest of us

https://www.yahoo.com/video/credit-card-rich-person-100115664.html

Five tips to start your journey toward feeling good about money. 

People who say that they are not good with money usually have some of the same things going on. They have debt. They live paycheck to paycheck. They don’t have any savings. They are pretty much depressed about their situation and carry feelings of shame and guilt. They prefer to not look at their bank and credit card statements. They are numb. 

What can be done? To be good with money you have to be ready for a life change. You must get rid of the habits that make you feel bad about your finances and adopt new ones that will take you where you want to be. 

Bottom line. Take charge of your life and your finances. No more feeling sorry for yourself. 

By adopting healthy money habits, you are saying yes to more money, less stress and anxiety, and higher life satisfaction. 

There are many things you can do to improve your financial well-being. Let’s start with five. 

1. Only carry debt if other people are paying for it

Consumer debt is the dream killer. It takes a long time to pay off and you end up resenting what you purchased. Debt is one of the greatest causes of stress in households along with work. If you had no debt, you could quit the job you hate while you look for another one. 

By carrying debt that other people are paying for we are talking about Assets. Real Estate Rentals. Motor home rentals. House Hacking. Not all debt is bad. 

2.          Have a fully funded emergency fund

Do you want to feel free? Your emergency fund’s purpose is to bring you peace. 

Knowing that you have this cushion makes you feel braver in life. You take more risks knowing that if you fail you have something to fall back on for a few months.

3.          Pay yourself first

Invest in yourself. Take the class. Buy the book. Hire the coach.  Designate a number that you will invest monthly or yearly. Allocate this money every month or at the beginning of the year. If you are waiting to invest in something specific then put this money in a High Yield Savings account. 

After you pay yourself first, focus on your other expenses. If you feel that you are coming up short after you pay yourself, then look over your expenses and see if all your spending aligns with your values. If you can’t or don’t want to make cuts, focus on increasing your income. Some ways you can do this are by using credit cards that give cash back, getting a higher paying job, being more strategic with your taxes, or having another source of income. 

4.          Have a system in place for how you track your spending, income and investments

for your household. 

Every home needs multiple systems. Systems for keeping it clean and organized and systems to pay bills on time each month. 

In addition to these there needs to be a system in place where you feel in control of your money. That can be by creating a monthly budget, having quarterly money check-ins with your spouse, always having money goals with action steps.

5.          Talk about money like if you’re talking about what you did over the weekend. 

Let’s make money a less taboo subject. Talk about it at home. Talk about it with people whose financial situation you admire. Share your financial dilemma’s and ask for guidance toward getting to a better place from a coach or someone you trust.

You have so much to learn by engaging in money conversations. You can also learn by being in a group with people who have similar interests when it comes to money. 

—-

It’s not easy to change our ways. We have been conditioned by our parents, our environment, and experiences to feel and think a certain way about money. It will take time (about 3 months) to develop new habits if we stick with it. You owe yourself that.

It made life better for many families and then it was gone.  

Losing the monthly payments from the Expanded Child Tax Credit has been devastating. The credit provided income stability, food on the table, less debt, less stressed-out parents, and opportunities for fun. Regardless of your situation, if you received it, you put it to whatever use was needed for your family at that time. 

The amount received was not enough for luxury vacations or other splurges, it was enough for day-to-day things like groceries, childcare, home and car repairs, eating out, extracurricular activities for kids, school uniforms, etc… That is exactly what it was being spent on. 

Although the pandemic restrictions are lifting, we are still in hard financial times. Inflation is at an average of 7.9% today. Families are paying more for essential items every day with no financial support from our government. Are children safe without this incentive? Are their emotional, physical, and spiritual needs being sacrificed?

It is true that there is a larger credit being given during tax time for each child until 2025, but some families cannot wait to get support once a year. They need to survive and thrive monthly.  

—-

Why is it that when something was working so well, it was so short-lived? Other countries offer this support non-stop, Germany, the UK, Denmark, Turkey, and Ireland. The primary requirement is a residency and sometimes employment. Aside from that, there are no income requirements. The deal was better in the United States in that families had the option to waive the monthly payment option if they prefer to wait until tax time. 

During the time that the Child Tax Credit was in effect (six months), there was an impact. Child poverty decreased. Children were happier because their parents were happier and less stressed. They had access to opportunities that perhaps they would not have had without the monthly installments that their parents received. 

This may not have benefited you directly, but it sure did benefit 61 million children. As a country, we should advocate for the well-being of all. Offering this benefit again will do just that. 

Resources

https://www.newyorker.com/news/q-and-a/the-devastating-effects-of-losing-the-child-tax-credit

https://www.npr.org/2022/01/27/1075299510/the-expanded-child-tax-credit-briefly-slashed-child-poverty-heres-what-else-it-d

It’s like when you’re dating and you think you are good, but then you get married and you’re like whoa, this level of commitment is beautiful. It’s like that.

Is it still the American Dream to own a home? I hope not. Let’s not over glamorize a huge expense. But we all need a place to live and when it comes down to it, I hope everyone will own a home one day. 

The emotional, social, and financial benefits are worth saving for. 

First, I agree. Owning a home is not for everyone. Those that want to live a nomadic life don’t need to bother. Neither if you are not able to afford a home on your own. That’s it. If you do not fall into these two options, then there is a way for you to make this amazing purchase part of your life plan. 

Why is owning a home better than renting? 

Emotionally

• You are more at ease; don’t worry about being asked to move when the landlord wants their home back
• You can do whatever you want to the property; add your personal touches when it comes to design and renovation
• You are more likely to see your home as your sanctuary and place of refuge
• Your wellbeing is enhanced knowing that you own your space.

Financially

• You can sell the home for a profit
• Tax incentives are based on what you pay in interest every year and taxes
• If you own a business and work out of your home, there are more tax incentives for you
• You can pay it off and not worry about paying for a place to live in the future
• You can use your equity to build wealth or in case of emergency
• Don’t have to worry about rent increasing 

Socially

• You are more likely to become invested in your community and advocate for change when necessary 
• You build deeper relationships with your neighbors
• You are proud to share your home with others
• Your kids have a yard

Owning a home is a big commitment that requires a good amount of capital upfront. Also, all home repairs are your responsibility. Many people get scared of that responsibility. There are ways to prepare yourself for those expenses. Sinking funds are the best way. Save a set amount each month so that when something comes up you have funds already in place. Have this money liquid for easy accessibility when issues come up.  

Don’t ever think that owning a home is not for you. Let go of that scarcity mindset. It’s for everyone that wants it. Ask yourself “how will I get there?” Talk to people who are homeowners and ask them how they made it happen. 

Resource

https://www.businessinsider.com/personal-finance/why-buying-a-home-is-better-than-renting

It’s worth it. 

How can we buy back more time? These days, many resources can be purchased to buy us more time, meal delivery, house cleaning, personal assistant, and nanny. The decision comes down to what you can afford. 

Everyone is talking about cutting back these days, but that’s a contradiction to the other thing they’re saying which is to earn more money. 

I lean towards increasing one’s income if times are tough. I feel that is an optimistic outlook and cutting back stems from a place of lack. Many have been conditioned to assume they can’t earn more, so they always look to make cuts in their life. To feel rich, we need to make rich decisions. 

The best way to get more time to build wealth is by outsourcing and delegating. 

Most time savings services will cost you hundreds of dollars a month. 

Except for grocery delivery. 

This service will cost you $99 for the yearly subscription and about $40 a month in service fees and tips depending on how often you order. According to https://www.fivestarhomefoods.com/blogs/grocery-shopping-facts/#:~:text=How%20long%20does%20the%20average,hours%20grocery%20shopping%20per%20year the average person spends 60 hours a year at the grocery store including driving there and back. That is 5 hours per month. Is it worth it to pay $99 to have someone do your grocery shopping for you? Heck yes! 

How can one afford to pay for this service if you are just starting to create your rich life?

• Eat out less
• Use credit card points to pay for your subscription
• Gas money saved getting there and back
• Sell items that will add up to the subscription price

With 5 extra hours a month, you can work on your side hustle if you have a full-time job. You can spend more time with your family. You can create a household budget and review it weekly. 

Five hours is a lot of time. Any other service that will free up this much time will cost you at least $100 a month! 

Time to create wealth is your ticket to freedom. Delegating and outsourcing are necessary steps to do this in a healthy and productive manner.

How are you buying yourself time to reach freedom?