Jenn Steliga is a Financial and Personal Coach. At Jenn's firm, she covers the behavioral and emotional hurdles that can hinder financial planning progress.Read More
Financial Blog For Busy Families & Impact Investors
FIRE stands for financially independent, retire early. The movement continues to grow, with retirees in their 20's through 40's. It has caught on because it is unexpected - we don't picture retirees being so young.Read More
For most of us, the start of a new year is the signal of a new beginning and an opportunity to start fresh in different areas of our lives. I heard someone on NPR say that it is not just the new year, but also at the start of a new month, a new week and even on days off that we take the opportunity to reflect on our lives and set goals for the future. My resolution has been the same for the past few years: to slow down and remember to appreciate every day. We really have no idea what the future holds, so it is important to find that balance between preparing for the future and living for today. Here are some cases I saw in 2015 which re-inforce this:
I met a woman in her 60's. She told me how her mother said there was no need to save when she was younger because she planned on leaving her a sizable inheritance. The mother is now in her 90's and has paid an astronomical amount on end of life care (medical needs, home aids, etc). There is no inheritance to speak of and the daughter is not able to retire anytime soon.
An otherwise healthy person in their 60's died of a heart attack. She was a meticulous planner and saver and expected to have another 30 years ahead of her.
A man in his 50's was laid off and unable to find a job, essentially pushing him into early retirement which his portfolio cannot sustain. He is working to develop new skills and / or to start a business that can help offset some of his expenses. It is not where he planned to be, but he is having fun with the new challenge.
One couple tried for baby #3 and ended up with twins! They are very thankful and feel blessed, but they are now dealing with the reality of how 4 children is different financially than 3. Priorities are shifting and they are taking one day at a time.
A young woman developed symptoms of a chronic condition that will be putting her on disability. Thankfully, she has insurance, but her income obviously won't be as much as her full-time salary.
You may be surprised to learn that money CAN buy happiness - but only to a certain extent. This Wall Street Journal article outlines some interesting findings: (1) Life experiences give us more lasting pleasure than material things. A once-in-a-lifetime trip still gives you something to talk about long after your favorite gadgets end up in a landfill. While it is important not to go overboard with any purchase, I try and encourage clients to make room in their budget for a monthly date night or an annual vacation.
(2) Avoid the temptation to join the rat race. The more money we make, the more money we spend. When our salary increases, we may buy a bigger house in a better neighborhood, put our kids in private school, or invest in other luxuries. These changes lock us into needing that extra income which may or may not be easy to sustain long-term. They also expose us to an environment where we see other things we want that require more money - welcome to the rat race.
(3) Spending on other people makes you happier than spending on yourself. Decide how much you want to spend each year on gifts and charity. Don't forget to also update your estate planning documents to list the beneficiaries of your wealth upon passing.
(4) Get a shorter commute. The article cites a study that reports that people with longer commutes reported lower overall life satisfaction, all else being equal. Look at the option to move closer to work, so you can reduce the gas bill and spend more time with your friends, family, pets and hobbies.
Here are a couple more thoughts that are not from the article, but from the book Hector and the Search for Happiness by Francois Lelord.
5) Making comparisons can spoil your happiness. Don't compare yourself to your co-worker or friend. If your life works, that is all that matters. It is good to be motivated and ambitious, just don't focus on measuring yourself by others successes.
6) Many people only see happiness in their future. Don't let that be you! Take time to reflect on your life daily and be thankful for what you have in the present.