Category Archives: Budgeting

How to Build Real and Sustainable Habits For Health, Wellness and Finance in 2019

When people tell me that 2019 is going to be their year, I have to laugh and roll my eyes. Isn’t that what everyone says? When I think seriously about how 2019 will be different, I ask myself these questions, “what did you do last year and why was it not a good year for you? What will actually be different about this year? Are you not happy with yourself? Could you be better? Are you actually going to change?”

Personally, I try to maintain a level of discipline in certain areas of my life. Over the past couple of years, I have remained focused on my goals despite circumstances changing and other challenges I face daily. Yes, each year is different, each year has a different mix of people surrounding you or different locations, but the common denominator is always the same. You. Knowing I only have control of myself in life and the choices I make, I approach resolutions in a slightly more strategic way. Before the year begins, I will set an expectation of exactly how I want to finish the year; a vision that I can revisit whenever I want to. This vision will be within the realm of possibility, but will require specific behaviors and routine changes to achieve. These routines become the foundation for the resolutions I set. They will be purposeful, actionable and measurable. I like to, as they say, “beat the market” year after year. The market being a normal progressive way of life. Whether my goal is to make more money, travel to new places, meet new people or upgrade my quality of life, I am always striving to improve.

The main way I work to ‘beat the market’ and improve my life is through altering my habits each month. Building positive habits throughout the year is a great way to make sure you ultimately achieve personal growth and embody the vision you had for yourself at the start of the year. Even small changes to your daily routine can have tremendous effects and snowball to improve other areas of your life.

Every year we all make resolutions and try to “stick to them.” But the reality of the matter is carrying out these resolutions can be daunting and feel impractical. but my method is much more sustainable for me. I try and make it into a game. So instead of making 1-2 resolutions at the start of the year, I will make 3-4 mini goals/resolutions at the start of each month and focus only on those habits/goals for the 30 days. This is a way of tricking my brain to build a strong new habit and become a better person. Grooming myself to be better and hold myself to a higher standard. I read the book the “Power of Habit” by Charles Duhigg and it takes 21 days to build a habit so 30 seemed right on par.

Instead of setting a vague resolution, for example, “get fit in 2019,” a better goal would be to specify and implement three new habits that would help to make you more fit. For example, set your alarm a half hour earlier in the mornings, drink 8 glasses of water every single day, and do (3) 1-minute planks every night. Some of the goals can be more focused toward self improvement as well. Its a collection of little things that make big changes in your life. If you can make them attainable and more specific the better. Here are some examples from my first three months.

January:

  • Only 1-cup of coffee per work day (black, no sugar, or milk)
  • Finish every shower by turning the nozzle to pool temp (supposedly much better for your body, it gets easier every day I promise)
  • Read 10 pages every day.

*It’s march and I already drink much less coffee and don’t even mind that it’s black with nothing added, I feel much healthier. Showers are cold in the winter but I barely mind it now. I read every single day much more than 10 pages a day, it’s an ingrained habit now.

February:

  • Make my bed every single day
  • Drink a glass of water first thing in the morning
  • Complete 100 calf-raises every night while I brush my teeth
  • Eat a vegetable every single day

Some month-long habits I plan to implement this year:

  • Give up “candy” for 30 days
  • “Pool temp” showers every day for a month
  • 8 glasses of water every day for 30 days
  • Pack lunch for 30 days instead of buying lunch
  • Make bed every day (psychologically, a groundbreaking feat for your day)
  • Lay your clothes out every night for the next day
  • Give away thirty pieces of clothing, one article for every day of the month
  • “No spend days.” These are days where you spend “zero” money during the day, no cash purchases and no charges to the credit card. See how many you can get a month.
  • Meal prep for 30 days
  • Take a vitamin every day, especially those that you are lacking in. I take Vitamin D every single day.
  • Get in bed by 10:30p on weekdays, 1-2a on weekends.
  • No alcohol for 30 days, or you can do “no beer”
  • Be active every day for 30 days jog/bike/gym
  • Communicate with someone from your past, 30 different people in 30 days
  • Track your finances for 30 days, income and expenses every single day. (I’ve been doing this for almost three years)
  • Not going shopping for 30 days
  • Stay below or above a certain weight for 30 days
  • Keep your room/house at an acceptable standard of clean for 30 days.
  • No TV for 30 days
  • Follow the stock/real estate market for 30 days

Many of these small habits, can develop into lasting, Keystone habits. Keystone habits provde the foundation for how you live your life and provide a stable foundation for building and adding new habits. The best way to make big changes your life is to make small changes. It’s been about three months since I’ve started doing these new, mini habits and I have already started to notice my life changing a positive changes. I hope this post will inspire you to take action with your own life and get the results you really want. Best of luck!

7 Financial Lessons from Ancient Babylon

I just finished reading the book, the Richest Man in Babylon. This is a short book of probably 150 pages in a decent sized font. The book was written by a college professor in the 1800’s, it was all about stories translated from texts of the ancient city of Babylon. The most interesting take away from the book is that the stories, even though they were written 100s of years ago, are still relevant to many of the financial issues that we as people, millennials especially, continue to face today. The book is about a man named Arkad, who was the richest man in Babylon, even richer than the King. The King sought to find the reasons as to why he was so independently wealthy, so he invited him in for an interview to understand what he learned. In this passage, I will cover some of the lessons and issues they brought up, and show you how they are still relevant today.

Lesson One: ‘Fatten Thy Purse’

One of the first lessons of the book and I believe is the most important is to pay yourself first. How can you expect to be a wealthy man if you do not have any priority of savings in your life? If a man receives 10 pieces of gold a year he is to keep at least 1 of them for himself and adjust his expenses accordingly. We can utilize this same method today by using an extremely powerful financial tool called the 401k or 403B. You can adjust this amount to come right out of your paycheck, Pre-tax or Roth, so the savings are out of sight and out of mind. Trust me, after a while you won’t even realize this money is affecting you because you will naturally adjust your expenses to what you can afford based on the lesser amount. Now what you have to be careful of is the credit card trap. With lines of credit, you still need to save 10% of your wealth but you cannot overspend on credit so that your net worth becomes meaningless.

Lesson Two: ‘Control Thy Expenditures’

This means if you are always buying the best most delicious food, the nicest robes and the finest horses you will have no money left over for creating wealth. What this translates into is if you are buying the latest Apple products, the newest Gucci loafers, always going on vacations or living above your means in a luxury apartment you are not saving because you are spending. The money is going into your pockets then leaving immediately. One of the biggest lessons of the rich is the concept of ‘frugality’. This goes along with another lesson that being wealthy is as simple as spending less than you make. A very simple concept but hard to put into action with the distractions that life throws at us these days. Advertising and credit cards make spending the easiest thing in the world.

Lesson Three: ‘Make Thy Gold Multiply’

The story goes on to give the laws of gold. This would be to put the savings you have(the 10%) into action by investing in smart investments to earn more money. He talks about them as your children and they will have children and multiply. This will make you a very rich man. These investments could be investing in a jeweler, traveler, salesmen, sword makers and in return set up a profit structure to get paid a return plus a rental of money fee also known as interest in this day and age. Today we can invest in things such as real estate, bonds, stocks, funds, gold, commodities etc.

Lesson Four: ‘Guard Thy Treasure from Loss’

Just as Warren Buffet put it, the name of the game is, “never lose money.” Whether that is safeguarding your smart investments, minimizing risk, adding “stop losses” to your trading account, or “protecting your pouch of silver from thieves and foreign armies.”

Lesson Five: ‘Invest in Your Dwelling’

Owning real estate is a great way to build equity and wealth where you live. Every mortgage payment is a way of paying yourself first so that one day you can refinance or sell the property for its future value. This also works well if you live in the property. The value will increase as well as paying down the debt.

Lesson Six: ‘Insure a Future Income’

One of the worries the ancients of Babylon had was that when they get old and tired they will not be able to work as hard and provide for their family. They can mitigate this by ensuring future income when they are older. Making part of your investments long term will help with this. Something we can do in this day in age I invest in long term funds or bonds that we will be able to sell when we retire and live off of the sale of the assets. Or a long term real estate holdings as an investment property. Either way, you want to be prepared for when you are no longer able to work effectively and provide for either yourself or loved ones.

Lesson Seven:  ‘Increase Thy Ability to Earn’

Once you have mastered the other lessons it is essential that you increase your wage as to multiply the lessons and become richer. Everyone has something that they are good at and the point is to find that skills and act on it to increase wealth for something that pays the most. If you have a job you need to figure out how to outperform as to get promoted or if you are a business owner how can you increase sales or product lines to bump up your income.

It is crazy to think that these lessons are still relevant in this day and age. When Babylon was uncovered from the sand, archeologists found ancient rock texts with these parables. You see them today to build your wealth as the ancients did in civilizations a long long time ago.

Reference:

https://www.entrepreneur.com/article/249179


Want A Raise? Start looking at your Diet!

Eating vegetables and eating healthier is similar to getting a raise! I cut my grocery bill in half, while also still being incredibly healthy. Sometimes you can be incredibly frugal in your life by looking at some of your mindless purchases that you make at the supermarket.

What I’ve have been realizing more and more since I turned 28 is the fact that we as humans do not need a whole lot to survive. When you are a millennial living in a big city, you have an endless amount of things surrounding you that influence every thought. Whether it’s the things that your friends are doing or buying to what you should be eating when you go grocery shopping or how you should be eating whether its ordering seamless or following your co-workers to an expensive salad place for lunch. One of my goals for 2019 or resolutions was to not eat any lunch out during the work-week. In order to do this I was going to have to take my diet a lot more serious and learn how to cook a wide variety of things to sustain a healthy and low cost budget. We all have goals in life, why let expensive food get in the way of those goals.

The first things that i realized is that cooking is work. Whether its learning how to cook perfect rice, learning what foods go together and getting your timing down so all the food is ready around the same time. If you want to be good at something you are going to have to try and fail and keep trying. I almost always have a base of rice, farrow, lentils or my favorite “chickpea Pasta”. In terms of saving money Dave Ramsey always advocates for the “rice and beans diet” They are full of protein and will fill you up. The best part is that you can get a lot of basic food for a cheap price.

The second thing that I do is add a small amount of meat, turkey, pork, chicken or ground beef. Then the third part is to add a huge mix of cooked vegetables that I buy raw. Simply raw vegetables are some of the cheapest foods you can buy at the grocery store usually coming in around $1-3/lb. These are also the foods that are going to be the best for you. If you can make a couple meals at one time and spread them out during the week you can save a whole lot of money on food and living expenses.

After reading the book “how not to die” I realized the simple truth that a lot of the healthiest foods you can buy are also the cheapest. I started eating onions, zucchinis, kale, beets, Carrots and potatoes and my overall grocery bill went down significantly. At first last year I was paying $600/ month on food and groceries (Manhattan) after really trying to work my diet I got that bill down to $200-$250/month. This took a lot of practice meal prepping and being very disciplined. With how many options there are in NYC it’s easy to grab some quick hot food or hit up the local Duane Reade.  

List of Some of the cheapest Vegetables as well as some of the healthiest choices that i incorporate into my personal diet every week.

  • Lentils
  • Kale
  • Beets
  • Canned beans Pinto/Black
  • Chickpea Pasta
  • Bananas
  • Potatoes
  • Peppers
  • Carrots
  • Broccoli
  • Farro

Another tip: Water, Drink tons of water. It is the best liquid you can drink and will help replenish your body when it is thirsty. I was buying 2 cartons of almond milk (lactose intolerant) and it was costing me a fortune. One day I just stopped buying it and just drank water instead. I started feeling better and was saving $9 a week. After a few weeks I started noticing a drastic difference, my meals were averaging $4 a meal compared to a $15/work lunch and a $10 dinner. I was able to start saving loads of money from my paychecks, and in-turn investing more.

Why Constantly Tracking Your Income and Spending Will Give You More Focus on Financial Success.

If your life is anything like mine, there comes a time every month when you don’t know if you can actually afford anything. When you hand the bartender your credit card, you silently pray that it doesn’t get declined. This is usually around the time when you are waiting on a paycheck, have just paid off your credit card statements in full, but still owe your landlord rent for the month. During this time you have no idea of your financial standing and are too lazy and scared to look. So you continue to stress and you continue to pray.

As I looked into ways to eliminate this monthly stress, I read a lot of articles that focused on the importance of consistency, goals and budgeting, etc. I also began reading a book called ‘The Power of Habit’ by Charles Duhigg. In this book, Duhigg explains why we have habits in our lives and how the habits we keep become the distinguishing factors between failure and success. With motivation to change my habits and a goal to become more aware of my finances, I began a daily budget tracker. On March 1st, I made a commitment to track all of my finances to the penny, every single day.  

While this task might sound daunting to some of you, I can assure you it becomes second nature in no time. There are plenty of finance tracking apps out there, but I wanted to keep it simple and use Excel as I suggest you do as well. As you will see below, I created a table with the days of the month across the x axis and a list of income and debt sources along the y axis. Laying everything out has helped me become grounded in the reality of my financial standing, which has in turn motivated me to take more action towards achieving my financial goals.

How to go about tracking: Open your spreadsheet and then open all of your banking, credit card, stock trading apps on my phone. If you do not currently have electronic access to all of your funds (assets and liabilities), I would download these and keep them on your home screen With these open, simply input the data into the appropriate rows on the spreadsheet.

You can also build out a graph as I have done below, that will pull in your inputted data and adjust accordingly. Keeping tabs on your daily spending is a cool way of learning about who you are as a person and what you value the most, by what you spend most of your money on. So many of our purchases these days are mindless because we keep our finances out of sight and out of mind. This is why when we open our bank account after a month or so, we wonder where all of our money went. This routine allows me to see where my money goes every day and how my investments are growing. Saving money is a checks and balances system if you will. Through tracking, as you learn about your losses/gains on a daily basis you will be able to clean up your spending and increase your savings. The first step to financial success is confronting reality and taking responsibility for your spending.

Below are some screenshots of exemplary tracking.

May 1 May 2 May 3 May 4
Cash (estimate) $350.00 $328.00 $317.00 $298.00
Checking 1 $800.00 $788.00 $812.00 $806.00
Venmo $45.00 $45.00 $58.00 $62.00
Savings $1,500.00 $1,500.00 $1,500.56 $1,500.56
Brokerage $1,289.00 $1,290.00 $1,311.00 $1,298.00
401k $12,785.00 $12,790.00 $12,811.00 $12,806.00
Total Assets $16,769.00 $16,741.00 $16,809.56 $16,770.56
Credit card debt -$4,876.00 -$4,800.00 -$4,811.00 -$4,750.00
Student loans -$26,000.00 -$26,000.00 -$26,000.00 -$26,000.00
Total liabilities -$30,876.00 -$30,800.00 -$30,811.00 -$30,750.00
PNW -$14,107.00 -$14,059.00 -$14,001.44 -$13,979.44

Minimalism: A lifestyle for us all

Do you remember the apartment I mentioned in my last article? The one I moved in to, to pay $200 dollars less a month for rent? Well since signing in September, my monthly payment isn’t the only thing that has decreased significantly.

Back in August, at the peak of our desperation to find an apartment, my roommate urgently called me from an open house showing. I could hear the smile in her voice on the other end of the phone. “I think this is our place. It’s small, don’t get me wrong. The rooms are tiny. But the location is perfect and rent is unbeatable!” Before I had a chance to respond, my phone started buzzing in my ear as pictures of the place popped up on my screen. I put her on speaker and zoomed in on the images. The place looked livable from what I was seeing, but pictures had previously deceived us. I decided to leave work early and head over to catch the tail end of the showing.

She wasn’t lying, the apartment was very small. Standing with the realtor in the kitchen, the most spacious room in the entire place, I brought up the questions he didn’t want to answer. “So what exactly are the dimensions of these rooms? I need to make sure my bed will fit.” He lead the way to the smallest bedroom without a closet, folded open the crooked, shutter style doors and let me walk in. “The room you are in now is 7×7 feet.” I pulled out my phone and Googled the dimensions of a queen size bed. “Okay, it looks like it will just barely fit. Queen beds measure about 5×6.” We both giggle sighed and shrugged our shoulders.

When I made the decision to live in this apartment, I knew I was going to have to get rid of over half of my belongings. I knew I did not have room for all of the clothes, furniture, decorations and other STUFF I had been living with for years. What I didn’t understand at the time was that the terms of this commitment would change my life for the better. Now even though I only have a bed in my room, a wardrobe consisting of only the clothes I feel good in and a fridge with only the food I will eat within three days, I am more satisfied than before.

Over the holiday break, I watched the documentary Minimalism on Netflix. It was amazing hearing neuroscientists and other striving minimalists describe what I have been experiencing for months. One minimalist explained, “every possession serves a purpose that brings me joy…when I look around I have to justify to myself, does this add value to my life, and if it doesn’t I have to be willing to let go.” Letting go of things that do not have utility can be difficult, especially if we have an emotional attachment for whatever reason. Speaking from experience however, the letting go is the hardest part. Living life with less has not only helped me save money, but has allowed me to shift my focus toward my relationships and my personal goals.

So this year I challenge you to first watch the documentary, and then begin taking small steps to become more of a minimalist. No, you do not need to move into a smaller space to start living this lifestyle. I do however, encourage you to choose quality over quantity. Let go of anything in your life that isn’t serving you right now and begin valuing and caring for those things that do. Needing less will not only make you richer in the bank, but richer at heart.

Mind Over Money

When I graduated in the spring of 2015, I thought I had it all figured out. I had some money saved, a job lined up and an apartment to move in to. College had been a blast, but I felt mature and ready begin my life as a real adult. I was going to succeed and it was going to be a breeze.  

Now, a year and a half later, I sit here writing my first post for my brother’s finance blog. See, I used to think this blog was dumb. I didn’t understand what BeatingBreakEven really meant and always thought my brother was wasting his time talking about money so much. But after switching jobs in June for a salary raise and signing a new lease, for rent that was $200 dollars less a month, I realize I am exactly where he was. I am broke, have no concrete plans for my future and am extremely unsure of myself.

In the past few months I have been thinking a lot about my life and who I want to be. I’ve thought about what to do next in my career, thought about what city I want to move to and thought about how to save more money. I’ve also spent a lot of time contemplating my inner motives, my deepest fears and my varying levels of self esteem. In this process of psychological discovery, I have begun to understand just how powerful our minds really are. They can be our biggest tool for success and the biggest obstacle.

I have started to experience first hand how becoming more aware of my thoughts and psychology can really help me achieve my goals. I mean don’t they say that you can achieve anything you put your mind to? Mastering your mind will not only make you a happier person, but will keep you on track to reaching your long term goals. Since many of my goals are financially based at the moment, I went through last month’s credit card statement to recount my recent purchases. Besides food, almost everything I bought was unnecessary. Nails, makeup, new shoes, drinks at the bar, etc. Practically everything on there were things I bought to feel better about myself. For many of us millennials, our credit card statements are a long list of our deepest insecurities resurfacing as impulsive spending habits. It’s actually pretty scary. Working through my insecurities and understanding the motives behind my purchases has started to help me say no to a lot of things I normally would have swiped for without thinking twice.

If we want to change our spending habits, we first have to change our thoughts. Seems simple and intuitive on the surface, but our minds are really unexplored territory for many young adults. We millennials do not spend enough time understanding our needs, wants and desires and instead, act on impulse as a way to band aid our immediate emotional challenges. We are impulsive because we do not take enough time to think and we spend because we don’t want to feel. We really need to learn how to understand our thoughts and be okay with our emotions, so we can make healthy, logical financial decisions.

FOUR Financial Lessons from the Homeless

New York is one of the biggest financial capitals of the world. Finance is everywhere in this city, whether in the billion dollar hedge funds that are making million dollar deals or the restaurant owners calculating bar tabs, brunch receipts or tenants saving for the unruly rent they owe their landlords at the start of each month. 

One lesson I have learned from observing the homeless on my street, is that being a pure minimalist has its benefits. These people carry with them only what they need and nothing more. It would be inefficient to carry around dead, excess weight. We as millennials need to understand why excess is bad and recognize how our spending habits are based on desire instead of necessity. If we all became more aware of the things that we buy and their ability to clutter our lives, we might start to realize that material goods do not help us meet our goals or delay the process.

The second lesson we can learn from the homeless is how we can market ourselves well to attract the attention of others. I regularly encounter homeless individuals on the subways and in the streets. They are holding signs that tell their story or are yelling at passengers about their specific misfortunes. Many of them have had a lot of practice doing this, so they know what works and what doesn’t. They are forced to put their best foot forward and try and try again to sell the bystanders on a few dollars of investment into them. They are essentially pitching themselves to an audience of investors, like you see startups do on Shark Tank. When you want money for an investment or business, or are trying to land the perfect job, you need to market yourself to your best ability. This means looking the part and connecting with the given audience on a personal and real level. The homeless live it everyday. Their survival depends on it.  Since yours doesn’t, if you were to apply the same sincerity and passion into improving your current state, you would likely get very far.

The third lesson is utilizing the resources around you to the best of your best ability. I was in the train station one time and a homeless man was cleaning all of his clothes in the bathroom sink. Since the station is a public facility, this was free to him. He was being resourceful. I also see many homeless people using public places for shelter or the public library for entertainment to pass the time and read or subway seats as beds. We as millennials also have boundless resources around us that will cost us little to no money to utilize things such as books, mentors, the internet, newspapers, other people in our field willing to help us if only we just ask. Many of us do not use these resources to our advantage as we should.

The fourth lesson is that homeless people ask for what they want. If asking doesn’t work with one person, they try and try again. They are relentless because they need to survive. They will badger so many people and most of the time it works. I know because I see so many people fall prey to their tactics and reach into their pockets to grab money. Its human nature to feel empathetic towards other people and want to help them out. Ask for what you want and if you get denied ask someone else.

The final lesson to consider is that homeless people use a cash based accounting model. These days everyone is in debt. Debt is a tool, but most of the time people, especially people our age, abuse this tool. Homeless people collect cash, use that cash and simply go and try to get more when they run out. They don’t just put their purchases on a credit card. People need to realize that we should only spend what we have available. Try carrying around a specific amount of cash each day, spending only what you need and nothing more. Don’t always be putting the little things in life on a credit card because it creates bad habits that are hard to stop.