July 22, 2022 • 46 mins
When we look at the ends of the spectrum of financial planning, we either get a one-page financial plan with limited deviations to financial planners who will give you a three-ring binder of stuff. For the second part of our ‘Radical Middle’ series, we will guide you into making a one-page financial plan that is attainable and will give you enough room for flexibility and customization.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Episode to create a frugal one page financial plan. Welcome
to the Frugal Friends Podcast, where you'll learn to save money,
embrace simplicity, rights, and liberate your life. Here your host
(00:20):
Jen and Jill. Mm hmmmm, Welcome to the Frugal Friends podcast.
My name is Jen, my name is Jill, and today
is part two of our Radical Middle Method series where
we're kind of going through. This is something we're doing
in our Frugal Friends club membership, and we are sharing
(00:44):
it with you because we think it's great and we
want you to be able to benefit from it. And
if you really dig it, you can join us in
the club and we have a whole video series and
workbook on it and other stuff. Something that feels so attainable.
I love it when someone just says, oh, it's a
one page it's a one page report, it's a one
(01:07):
page plan, it's a one page Oh that's fantastic. That's digestible.
But also it helps us to know how can we
get these things on paper, even for some big or
financial goals that we may have just a guide and
we don't really hear people talking about this in other spaces,
and we're really excited to have created a pathway forward
(01:31):
for our community that still creates room to breathe and
tailor it to yourself. So we really hope that this
is helpful for you if you're just kind of all right,
how do I get all this in order? Yeah, and
we know that a lot of people aren't talking about
it because we just spent ten minutes redoing the outline
for this episode, because the articles about it they didn't
(01:52):
fly like. We got together and and Jill was like,
I don't get it, and I was like, neither do I.
So we just did the we in the last ten minutes,
we redid this entire outline for you, and we are
winging it. And let's see who this episode is brought
to you by. Who's winging it with us? The Spending
(02:13):
Symposium audio flash sale. Thank god, it's a good one.
So prices are still rising and that's one of the
reasons we're sharing the Radical Middle method here and now.
And it's becoming increasingly difficult to plan and stick to
a budget. We know it's getting harder and harder, and
that's why we held the Spending Symposium last month. We
(02:35):
had twenty experts teaching you their tips for spending less
and saving better. So while that is over, the full
all access passes no longer available, we did want to
give you one more opportunity to get the MP three
versions of all of our expert interviews from this year's summit,
and we're actually going to throw in last year's as well,
(02:55):
So that's almost forty interview MP three you're gonna get
that you have never heard on the show. I think
it's thirty nine interviews. So if you need more help
controlling your spending right now, check it out. We are
only offering them for one week, so had to Frugal
Friends podcast dot com slash audio to see every session
and start listening. Oh that's exciting. Yes, So if you
(03:20):
need more than the what two hundred and twenty five
episodes and forty interviews in the audio flash sale, So
here are there? There are so many. Here are some
good ones to queue up after this episode that really
align and go deeper into what we're talking about today.
(03:41):
So the first one is episode one, goal Setting and Strategizing,
and we kind of tailor it for the New Year
because that's when the episode released, but it's in general
just about goal setting and strategizing. Episode one seventy one.
Should you focus on paying down debt right now? That's
a big top still a big topic. And then episode
(04:01):
one understanding the stock market and investing with Bolos. It
couldn't be. We have a lot of episodes on investing,
but this is my favorite one about understanding the basics.
She was awesome. She really helped down in a real way. Yes,
and I love her book is one that I recommend
quite frequently, which is Understand the stock Market, Grow your
(04:24):
Money from Clever Girl Finance. So let's get into our
new headlines, but we'll go over kind of what our
when we say a one page financial plan, this is
what we're talking about, and this we literally made this
up because that I couldn't. I feel like a one
(04:44):
page financial plan is really good. I feel like it's
really attainable when you So there are different ends of
the spectrum, and we always come back to the to
the middle. But when we look at the ends of
the spectrum, we there have the advice that says do
this only this. If you do anything any deviation from this,
(05:08):
then it's wrong. So you have like the one sentence
financial plan essentially, and then all the way over to
financial planners who will literally give you a like a
three ring binder of a financial plan of stuff that
you don't really understand and will never execute. And while
I love stickers and highlighters, no one's going to be
(05:30):
able to implement on a three ring binder. Yeah. So
so these are the extremes, and so we're like, Okay,
what's in the middle, what's attainable? And I think one
page that you create yourself is super attainable. It's not
just listening to what other people are telling you to do,
but it's also not planning so intensely and so complexly
(05:55):
that it doesn't leave room for deviation. Because life changes,
people change, relationships grow, and there is and change does
not mean failure. Deviation does not mean failure, and it
more often than not means growth. Um And so a
one page financial plan will give you room for flexibility,
(06:16):
for customization and also do ability, which is what we're
very much about. I love doability and ease, and I
think we are supposed to review this. This isn't a
set it and forget it. This isn't I wrote something
on a piece of paper and it was one page,
and that felt good, and then I forgot about it.
This is to be reviewed regularly, if not sensually, and
(06:40):
so we just want to again, there's not like a
specific article on what is the Frugal Friends one page
financial plan. We go into that a lot within our
membership and we can talk more for those who are
interested in that, but we want to give it to
our broader audience as well and how it works. So
there's not a specific article that's just here's what it is,
(07:01):
and then we're going to use articles to support how
we can implement on that one page financial plan. So
that's kind of going to be the way we moved
through this episode. Yes, so there are three parts to
the one page financial plan. It's goals, foundations, and then freedom.
And so your goals are your short and long term
(07:23):
goals or even short mid long term depending on your
income and your life plan. Uh So the time it
will take you to reach those goals will kind of
dictate whether they're short, mid, or long for you. And
then your foundations, your savings, and your debt. So we
(07:43):
believe debt is neutral, but you do need to have
a plan for paying it back because that's an agreement
that you made. So there there needs to be a
plan for saving your money and then also for paying
your debt back, and then free edom, which is investing
which we do support investing while you're paying off certain
(08:06):
types of debt because time in the market is uh,
we'll save you the most money overall when we're talking
about buying freedom, because that's essentially what investing is is
buying freedom. And the earlier you invest, the less you
have to pay for that freedom, and the earlier you
get to enjoy it. So those are the three parts,
(08:28):
especially for our lower or medium income earners, this is
gonna be what's going to set you up the best
in the future is time in the market. Absolutely, and
even in today's market, I'll put that little caveat in there,
we say the same thing knowing that we are in
a very different market today than we were even a
(08:50):
year ago, even two years ago. Uh So we still
stand by that statement. So the first article that we
are going to get into is about goals, and it's
about the short and long term goals, and it's by
It's from Investipedia, and it is talking about how to
set financial goals for your future. How did you feel
(09:13):
about this one, Jill? Did you like it? Better. I
really liked this better Again, our quick pivot in the
last ten minutes is fantastic. So for me, I think
anyone who's listened to us for a while it will
I might sound like a broken record. I love tangible tips.
It's something that carries over into the mental health field.
(09:34):
For me. While there's no quick fix for all of
the different circumstances that we may face in life, having
some sort of idea of what could I be aimed
at or what are some of the tools and resources
that would be helpful for me as I aim at
well being? And this article felt like that to me.
(09:54):
Of it's not going to look the same for every person,
but it is good and benefit a shoal for all
of us to aim at short term, mid term, and
long term goals. And I even like that they didn't
make that this aloof mysterious thing. They gave some really
great examples of what could fall into each of these
(10:16):
categories for those of us who just aren't quite sure,
what does what? What would a short term goal look like,
what would a long term goal look like? What do
I need to be having my sights on? And then
what are some questions that I can be asking myself,
So that felt really great to me. I would recommend
this article. So when we talk about a one page
financial plan, I think reviewing an article like this would
(10:38):
be really useful to say. If our one page financial
plan begins with goals, and we're talking short term, mid term,
and long term, well, then here's the things to consider.
So this one from Investipedia begins with the short term goals,
and they can include things like setting a budget. Uh,
at least looking at the debt making the goal of
(10:59):
reducing I know, we get into foundations of maybe the
how to, but that can be a goal, and starting
an emergency fund maybe if you don't already have one,
and I like how they highlight that having a budget
can help you know where you're going, Like, you can't
know where you're going unless you know where you are
(11:20):
right now. I know we've got a spectrum of opinions
on budgets, and that's okay. We can hold the tension
between I don't want to ever look at a budget
or I love budgeting and like, give me the three
ring binder. We could find ourselves somewhere in the middle.
But it is important, at least at this stage when
we're doing a one page financial plan, where are we
(11:41):
right now? If we can even look at a budget
in that sense, that's going to help us know where
we're going. And so again, examples of some short term
goals could be creating that emergency fund, paying off credit
card debt. Highlighting the credit card debt because that is
the highest interest debt, most likely that we have. Back
to Jen's point that debt is neutral, but we and
(12:03):
and not all debt is created equal, So there could
be different tiers of priority within your debt payoff absolutely,
and again it will what is short, mid, and long
term for you will be customized to you because based
on your season in life, how much you earn, your
(12:23):
earning potential, where you are even, like when we talked
about like creating your dream life, that's what you have
to do before you create your financial plan and create
that separate from money. Everyone talks about like their goals
in life, and like when I hear someone say their
first goal is like financial, I'm like, but why why
(12:45):
is it? Why do you have that goal? So you
have to have your life goals first and and have
those established, and then that really does dictate what is
considered short mid term and long term. But these are
really good um ages on what to expect. I mean, definitely,
everyone should start with a budget, and that is a goal.
(13:07):
Like the budget isn't just to get you to your
goal actually being able to budget regularly and not essentially
stick to a budget perfectly every month, that's not a goal,
but to make budgeting a habit that that's your first goal.
And people so quickly skip over that, and they skip
(13:29):
right to the debt payoff or the savings, and they're like,
why can't I meet my goals, because well, you didn't
first establish a budget. That is a goal to be
able to create that habit. So I love how they
pointed that one out there. And then they move on
to the mid term goals um which is like get
(13:49):
life insurance and disability income insurance. So we love term
life insurance. We think it is very essential to a
hole a stick financial plan, and not a lot of
people have it. But you don't know you need it
until you need it. So something like that, payoff student loans,
(14:09):
so we we move from these higher interest loans um
to the kind of mid range student loan or maybe
like a personal loan or stunt like that stuff that's
lower than a credit card but higher than a mortgage.
Right now, if your student loans are still zero percent,
(14:31):
that's not included in this, but when inevitably they do
come back um or if you have private student loans,
that kind of would be would be the next tier.
And then and then they say, consider your dreams. We
already know that you want to consider your dreams first.
But I love that they actually put this in a
(14:53):
mid term goal because we often view it as a
long term goal. Is like, whatever the dream is, that
it's the long term goal, but it is closer. It
should be closer to a midterm goal. So breaking creating
your dream life plan and breaking it apart and breaking
it apart until you see what's the what's the step
(15:14):
by step? How can I not maybe get there all
at once, but I can get there in the mid
term and then see it fully into completion in the
long term, but not necessarily waiting and for twenty years
and putting it off that long. And if you listen
to our episode about creating your dream life, then you're
you're already there. You've already done this step, but yes,
(15:37):
it needs to be done at some point and should
be a part of your one page financial plan, and
again permission to revisit and change some of those things.
I know some of my goals, many of my goals
I've shifted. The core of who I am hasn't changed
that much, but the way that I think that that's
gonna look does shift. But if we've got some financial
(16:01):
planning around that, and there's room to shift it, So
either way you slice it, paying attention to our finances
and making good decisions is going to really help us.
And then of course it moves into the long term
financial goals, which is going to be part of that
one page financial plan, and this article highlights which I
would agree with. One of the biggest long term financial
(16:22):
goals for most of us is going to be saving
enough money to retire. One one common thing that people
will recommend is saving ten to fifteen percent of every
paycheck into a tax advantaged retirement account. This would be
your four O one case four three B S or
traditional IRA raw IRA. Of course, if you can save
(16:43):
more than that in every paycheck, you're all the better
off to be able to do that. But connected to
this long term goal is the need to estimate what
your retirement needs might be. There's a lot of different
ways to approach that. Of course, none of us can
totally for sure, No, we don't. Depending on how far
(17:04):
away retirement is for us, that could be that could
be a few decades, and we don't totally know what
life is going to look like in a few decades,
which is why I appreciate they say estimate. We are
just estimating. Some of that includes considering what you're desired
annual living expenses during retirement is going to be, uh,
subtracting the income that you will receive, so this would
(17:28):
social Security, I don't know for those of you who
are close to retirement, that's there for you, with those
of us who are further away, UH, t b D,
t v D. And estimate how much in retirement assets
you need for your desired retirement date and based this
on what you currently have and are saving on an
(17:49):
annual basis um. There's tons of online calculators that can
help you figure that out. This episode isn't to totally
go into how do we do that, so giving a
little bit of the overview of how would we save
for long term goals? Yeah, and we would recommend this
this part of the financial plan maybe be like a
(18:11):
quarter of the page and really just having like your ten,
your five and your one year goal. And we're very,
very into having one financial goal at a time, like
just focus on one thing at a time, and that
is going to get you the fastest results. And when
we're trying to do things sustainably, doing things efficiently is
(18:34):
really important. So having your ten year goal and then
create a five year goal based on that, and then
creating a one year goal based on that, and then
breaking it down and just working on that one year
goal and then if you reach it sooner than a year,
then you can go on and create another year goal
based on that five year But we you can have
(18:57):
like a twenty year vision for your life. But when
you start getting into goals up to twenty years, that's
when you get that big binder like financial plan and
it's not you're going to change. Probably in the next
five years, even your ten year goal probably won't be
the same. So give yourself flexibility and room four goals
(19:18):
to change, but still have that north star, um that's
pointing you in the direction of your your dream life. Yeah,
one that gives you flexibility to change your mind. We
don't have that flexibility if we've not created it. Yeah,
So the next part of your one page financial plan
(19:40):
is the saving, debt and investing portion, and so that
is broken up. We break it down kind of into
foundations and freedom. So your foundations are your savings and
your debt, and they are the things that make buying
freedom easier. If you do the foundations right, then it
comes easier to purchase your freedom. And there is no
(20:04):
one right way to do the foundations right. The right
way for you is to make it as easy for
you to buy your freedom in the future. But you
still need to plan obviously to save, to become a saver,
to say, for short term expenses, and to pay off
your debt because it is an agreement you signed that
(20:27):
you would pay it back. So it's not something that
you can't ignore unless you know, maybe there's some student
loan forgiveness which you know, which would be great, But
let's let's focus on our our entirety of our debt too.
So our next article then is going over how to
(20:47):
balance saving, investing, and paying off debt. And while balancing
is probably my least favorite word because balancing is stressful,
um and I don't think money has to be stressful.
The article does, I think, provides some good questions to
ask what do you think, Jill? Yeah, I'm just stuck
on the balancing word and can't get the balanced beam
(21:08):
out of my mind. I don't know why our society
is so obsessed with balance when if you've ever been
on a balance beam, it's impossible and stressful and usually
ends in pain. So agreed. The radical middle is the picture.
The picture in the article is this woman who has
like four hula hoops. She has to hula hoops on
(21:32):
each arm and she's just she's swinging them around like
they're balancing, and she's just smiling and laughingly. She's having
the best time in me. I would be over here
with four hula hoops, like, ah, so what do I
do with all this? I'd rather just stand in nature. Yes, So,
(21:54):
this article I think is helpful and determining what's going
to be best for you. And we're talking again about
this one page financial plan and longer term goals and
investing and once we've looked at savings and debt payoff,
where do we want to put our money? And the
question that this article is attempting to answers, save, invest,
(22:16):
payoff debt? How do I approach all of these things
almost looking at each one like a tent peg? And
where do I place them? And how do I hold
it all intention in a way that creates a nice
tent and shelter for me? Uh, I have never really
gone tent camping, like maybe once and I hated it. Uh,
(22:38):
trailers for me maybe, But still I think it's a
helpful illustration of everyone's tents are gonna look different, some
of them are going to look like an RV, But
how are you going to hold each of these pieces intentions?
So they ask questions pretty much throughout the whole article,
which for someone who's a social worker, that's my favorite.
(23:00):
Just ask questions. You don't even have to have all
the answers, just ask all the questions. So the first
one that they ask is, well, what kind of debt
do you have? If you want to know where should
I be putting my money? Am I able to invest?
How much can I invest? One of the first questions
is going to be do you have debt? And what kind?
And again they highlight not all debt is created equal.
We think it's neutral, Like we don't use the terms
(23:22):
good debt bad debt. But there are debts that have
higher interest rates on them that we would want to
pay off sooner. There are some debts that have low
interest rates or no interest rates, and so in that
case we might not need to prioritize them as much
and there could be space in the budget to be
able to invest. H. Yeah, these plans on on this
(23:44):
one page financial plan because you want to review it
every year, like around every year. Maybe less, maybe a
little more, but but you are really focusing on Okay,
what's what what are the finances do I need to
get me to that five and ten? But what do
I really need to be focusing on the next year?
So looking at the type of debt you have and seeing, oh,
(24:07):
it's going to be much easier for me to buy
more freedom if I have less of this debt. And
we we categorize anything over seven percent as pretty high interest,
and so anything over that really should be prioritized. So
this kind of goes into the next one. What's your
(24:28):
rate of interest averse rate of return? The reason that
we say seven anything over seven is high is because
a diversified portfolio is probably is going to overtime with
inflation typically return anywhere from seven to ten percent. If
you are all inequities, you're going to see closer to
(24:50):
ten or twelve. But if you're diversified in some more
conservative securities, then we're looking at seven to ten. And
that's not the best, but that's typically the the average,
and so that's the benchmark we use. Can you do better? Absolutely?
(25:10):
Do we talk about how to do that on this show.
Not much um for us to talking about how to
save money on purchasing freedom and time in the market
does that, and so that's why you want to pay
attention to your rate of interest first, rate of return.
If you have higher interest loans that severe. I mean,
(25:31):
if you're seeing seven percent in the market and you've
got a seven percent car loan, that cancels each other out,
so you want to pay off that debt so that
you can get more into the market. Um. But if
you're seeing if you refinance, and you're seeing like a
two and a half percent mortgage, um, while you could
get seven percent in the market, then that one's kind
(25:52):
of a no brainer to Or if your student loans
or zero percent right now, putting more into the market
right now it is all so a great decision. The
next question to considers do you have an emergency fund?
They just use the term healthy emergency fund? UH can
can help you avoid expensive debt. That can help us
(26:13):
determine how much we can start investing or continue investing
if we've already got some of these basic foundational things done.
Of course, what is healthy to one person might look
different for another. There's various metrics for what an emergency
fund can or should be. Some people will save three
(26:35):
months worth of living expenses as an emergency fund, others
six months worth of living expenses for an emergency fund.
Others will save UH medical deductible for an emergency fund.
So decide what's right for you. Know that your one
page financial plan can include a tiered approach to that
(26:55):
of well, here's where it's at now, but here's where
I want to get it to be. But that doesn't
mean that I can't focus on something else until that
becomes maybe the next prioritized goal. But some version of
an emergency fund we want to look at. That's a
good question to ask ourselves. Yeah, uh so the last
one on here for me that all that I liked
(27:16):
is um the obviously are you meeting your employer retirement
contribution match? So that is the first thing that you
should be doing always because that is part of your
compensation package. You if you do not take it, you're
essentially telling your employer, no, you don't need to pay
me what we agreed upon. Uh So this is something
(27:38):
that's just part of your compensation. That is I don't
even believe counts as investing when we're looking at it
on the scale of investing, but it is something you
should always be getting your employer retirement contribution match at
any time. So if you're not doing that, do that.
And the last one I want highlight on here I
(28:01):
love that it's in this article is the question of
how can you best manage financial stress? And again, this
is going to look different for all of us. Our
capacities are different, but our mental health and financial health
are both extremely important and oftentimes do influence and bear
weight on one another. So when we're thinking about eliminating
(28:24):
debt or saving or investing, we do have to ask
ourselves what's going to be the pathway of peace for us?
What is going to create the most calm inside of us,
the most assurety clarity, just just what feels peaceable to
us mentally, emotionally, relationally. And so that's why I think
(28:47):
you see so many people making so many different approaches.
There certainly could be some quote unquote wrong ways of
going about finances, but there's certainly a lot of right ways,
and they don't all have to look the same. Right
for the person who pays off their mortgage early versus
the person who chooses not to and just invest, both
can be fine. It really has to do with what
(29:08):
does financial stress look like for you, and how can
you create the most peace in the midst of it.
For many people, it does include a lot of things
going on autopilot, not needing to think about this on
a daily, hourly basis. I think anytime we need to
think about something or be consumed by something regularly, it's
going to cause stress. So this one page financial plan
(29:32):
can help with that, finding ways to put our goals
on autopilot where it doesn't have to be top of mind,
but we have peace of mind in it. This is
an incredible question to ask ourselves. Consider your own self
in this, how you want to move forward again in
a way that's going to reduce some of that stress
(29:52):
but still be helpful for you. Yeah, and I'll give
you a bit of a teaser from our episode coming
next week with Jordan Grammant where he act really gives
a really he gave me like I was very like
mind blown about how do we find out what's causing
like us financial stress and not just what we're being
(30:12):
told is financially stressful, but like, look at your fears
about money, Like what's your biggest fear about money? Validate
that and don't give into the fear, but create your
financial plan to air more on the side of serving
that fear, so there can be a balance of our fears.
(30:34):
Tell us who we are, but when we're healthy, they
inform our choices. When they're unhealthy, they paralyze us. Anytime
we can respond rather than ignore, we're going to be
better off. Absolutely. You know what I love to respond
to and never ignore. I want to do it all
the time. I'm never fearful about it. That's right. It's
(31:10):
time for the best minute of your entire week. Maybe
a baby was born and his name is William. Maybe
you paid off your mortgage. Maybe your car died and
you're happy to not have to pay that bill. Anymore.
That's bills, Buffalo Bills, Bill Clint, this is the bill
of the week. Hi, guys, I wanted to call. I
(31:31):
had two things I wanted to let you know for
Bill of the Week. UM So, I just want to
start this off. I have life insurance. I bought from
Life Insurance probably like I don't know, seven years ago.
Um So I've had this accidental plan, a life insurance plan,
for probably like twenty years. I'm thirty seven, so so
(31:56):
less than that, but a long long time. And it
was just something that I signed at my bank, and
I have had fifteen dollars removed from my account every
month forever. And I've wanted to cancel this for like
a really long time because it's such just stupid. But
I've never picked up the phone to call because I
was just dreading a call and I was always like, well,
(32:18):
I'm not gonna be able to find them the number.
I don't even know anything about the policy. Anyway. I
finally I've been I found you guys like a month ago.
I've been binging podcasts and I'm like, I should just
call because fifteen dollars a month is a lot of money.
Um Anyway, it took me twelve minutes. They didn't even
find me on it. They canceled it in two seconds. Again,
(32:40):
I have term insurance for myself and my husband, so
it was just a waste. And I'm just blown away
that it took like no time and that I should
I should have. I just I'm gonna I'm not a mathematician,
but it's a lot of money. Other than also, I
listened to this old podcast about like going out to
the state to see if you have any money, and
my husband is like a hundred and forty three dollars
(33:01):
as well sitting at the state from that podcast. So also,
I just have to get something notarized at my bank
and we're going to get a hundred and forty two
dollars just for listening to Thanks guys, Wow, I am
so pleased. If you'd like to send us a commission
for that, like the commission Friends podcast, pay fifty cents
(33:27):
to send us one dollar. Yeah, that's awesome. I love
I love it when people get their money and they
take it away from people it doesn't belong to. That's great.
And the fact that I don't have to take it myself.
I'm not Robin Hood, but the fact that I could
help you be around Robin hood is great that Jill
(33:48):
and I could do that for you. Guest, take what's
rightfully yours. Yes, we've had so many people respond saying, yeah,
I looked up with the state and turns out I
had some money sitting there. Yeah, everyone should go. That
was from our friend Lisa Rowan from the Money Hacks episode,
and everyone should go buy her book Money Hacks as
(34:12):
a thank you. Like use everybody who's found money should
just take part of their found money to buy Money
Hacks by Lisa Rowan's amazing. She does not pay me
to say that. I just And also this canceling of
if I'm understanding correctly, accidental insurance. You still have the
term life insurance, but you recognize you didn't need this
portion of it, and now that's money back into your account,
(34:36):
which is fantastic, And it's so funny. We don't listen
to these before, like this is the first time we
heard that. We just mentioned how great term life insurance is.
So thank you for for validating that and not embarrassing
us as well. If you all listening, want to submit
your bill of the week, visit Frugal Friends podcast dot com,
(34:57):
slash bill leave us your bill. If it's a bubble bill,
we love those. If it's a person, we love those.
If it's found money, we love that too. What of
them is? Just leave it for us. We love it.
If you like it, we like it. And now it's
time for we went more fun with that. Yeah, I mean,
(35:24):
I'm having a good time. I'm on that high from
that Bill of the week. I love it. I'm so pleased.
So today we are going to share our one year
financial goals. How's that sound? Chill? It sounds great. You
love this, you love it too much? Well. So one
(35:46):
of the really cool things about the membership for me personally,
because as we all know, we do this podcast and
we do our membership for ourselves because it helps us.
And I do this podcast because I just want to
hang out with you more. Jen. Yeah, we are selfish.
We we did this within our membership with our members
of creating various goals and holding each other accountable to
(36:10):
create these goals. I'm not necessarily like a goal oriented person.
That sounds kind of funny. I'm an achiever, but just
kind of whatever is right in front of me, like
I'll just work hard, at it and achieve it. I'm
not necessarily thinking five years down the road, what do
I want to do? Anyhow, it has been really helpful
to get my brain and body working in this kind
(36:31):
of way. I am a calendar year type of goal setter,
so this question is hitting at the halfway mark for
us in or in the summer, and so for me,
I'm evaluating what I kind of said at the beginning
of the year, which for me, my main one year
(36:52):
financial goal and one of the things that you challenged
us with in the membership jen was that that one
year financial goal be something that you can do with money.
That and I'm probably butchering it, so so correct me
if I'm wrong. But my recollection is what can you
do that in doing that thing helps to create more money.
(37:13):
That's my summary of it. So for me Eric and I,
having bought the house that we live in two years ago,
one of the things that I've been wanting to do
with it is to create an airbnb to bring in
more money, but I want to cash flow the renovation portion.
So this is a goal for me. Of course, it
was a vision that I had when we bought the house,
(37:34):
but there's a lot of other things that we had
to do SOO was cash flow the Airbnb renovation, so
that when that's done, it can be a stream of
income for us, an additional stream of income. This is
the one year goal. We're halfway through. We have hit
many barriers, so there's a part of me this is
(37:54):
very vulnerable to share because I don't know if this
goal is going to be accomplished by the end of
the year. You can check back in. I don't know,
but I think that that's what makes it a goal
is it feels like a little bit outside of reach
for us. Some some barriers that are outside of our control.
We have hit, mainly with permitting, but that's okay. We
(38:15):
will persevere. But my my hope is for that to happen.
And so far, so far, we're doing well. We are
cash flowing it. I just really hope that it doesn't
go beyond the ear because I'd love to allocate then
the money that we had been allocating to renovations into
some investments. But slowly but surely, it doesn't. It doesn't
(38:36):
happen overnight, and it has not been for lack of trying.
You have been trying, like a twenty ft long by
three ft deep trench across our entire house. I got
real buff in that one. Then that trench is just decoration.
The trench is still there, all of the dirt and
(38:59):
say and I dug out now has grass growing on it.
And we are just a despicable neighbor to have right now.
But I'm working on it. If any of my neighbors
listening to my podcasts, it's not her fault, it's the city. Yeah.
So yeah, so we also that. I mean, so our
(39:21):
one year goal last year was to buy an investment property,
and we did that. We completed that in May, and
now well we did a workaround. We moved and then
turned our old house to an investment property because that's
what we had to do because we don't have just
(39:43):
four dollars sitting in the bank like other investors do. Uh.
So that happened, and so now our one year goal
is to finish the renovations for for this year, finished
renovations on the rental side of our new property, because
(40:05):
we are turning part of it into an airbnb or
maybe a mid term rental. We'll see. So that is
the goal for the rest of twenty twenty two is
to finish that and uh, check again, we got we
got high home December of this year, we'll have to Yeah,
(40:26):
we'll have to share in December what we finished on
our renovations if we are able to rent out the rentals.
Have a feeling tail between my legs. At least we're
not doing anything that requires digging or permits or anything.
So it is really all on us. I will I
(40:48):
will say, well, this isn't I know. We talked about
like focusing on one thing, but this was a very
easy thing to do. But I did get Erica roth
Ira for those of you who were wondering that it happen,
and now that's on autopilot and I had hoped for
that to happen in so one thing's accomplished. And Jill
(41:08):
did that all on her own. I was not there.
She told me about that. Actually, we were on a
call with our membership when she told everyone. I was like,
what I didn't by myself. Yeah, I'm an old dog
can learn new tricks. And that's true, but it worked
for me. It's impressive because you set up a roth
(41:30):
Ira like maybe once or twice in your life, so
like every time I help somebody set up a roth Ira.
I have forgotten how did you? Because I'm not doing
this every day, so I kind of want you to
check it for me. I still am like, I think
I need to bring my computer over and we need
to check and make sure that I actually did it. Yeah,
(41:53):
I will, I will check for you than um. But yeah, okay,
renovations rental both of us where we're at. That's where
we're at. You guys keep us accountable. They will, you know,
they will. Thank you everyone for listening and for keeping
us accountable. We are sharing, we've we've put it out
(42:14):
there now, so shop shops, bad Snip Snap podcast, it's
out there. You can't change this. Once Christian edits it,
it's there. And many of you know that we have
a private community who also keeps us accountable. We got
it coming at us at all angles, and we do
monthly monthly money challenges which is really fun. Again accountability groups,
(42:35):
so not just accountability for us, but accountability for each other.
We we share the wealth there and we want to
congratulate one of our members for a big win. Christie
kW shared with us that she just completed well, she says,
just completed my graduate Certificate of advanced studies and educational
technology and new literacies. We got some some accomplished people. Yeah,
(42:58):
it's fifteen credit hours b on my masters. I was
able to cash flow taking one classes semester for the
past year and a half, and we'll use what I
learned in my current job. It will also help me
in my side hustle of online tutoring. And because I
make a little more money for every three credit hours
of classes I take, will increase my final average salary
when I retire in six years. Hashtag still got it
(43:22):
do Christie six years away from retirement and still just
crushing it. Learn and learn a new thing. That is
definitely early retirement, Christie. Christie is not. You don't know
that's going to be early retirement. Oh my gosh, awesome, Christie. Yeah,
Thank you everyone for listening. If you want to check
(43:43):
out our monthly challenge community, head to Frugal Friends podcast
dot com slash club to see what challenge we have
coming up next. Love to see you there, We'll see
you next time. By Frugal Friends is produced by Experiality Jill.
(44:11):
How is the permitting going? Um? Oh? Jen It's Eric
has gone in person multiple times to the permitting office
and gets different answers ericas I've not gone with him.
I feel like I kind of want to at this point,
just so it can be a family affair. Oh my gosh,
(44:32):
they essentially messed up the permitting. I don't want to
go into too many details because well, we don't have
time for it, and maybe other reasons, but essentially they
filed the wrong permits and now they have no record
of it. Goodness, one part of it is done and
(44:52):
paid for, Like we paid three hundred four hundred dollars
dred something like that, and we're like, well, but where
are these permits and they're like, oh, you don't have those.
We must have filed it under this other permitting thing.
It's just like there's only so much capacity and emotional
energy that we have for this part of the process.
(45:14):
I will say, the actual labor of the renovation seems
totally doable. I just can't wait till we can pick
up a hammer again. Oh and also Eric did try
and do some work that he could do without the permit,
uh and sliced his finger with the chop saw. He
like finally worked himself up to hey, I could do
(45:34):
like these things and that would be fine before inspection.
Uh ten minutes over in the Airbnb side of the
house and slices his finger with the chop saw. Like
we were debating do we need to go to the hospital.
We decided not to because you know us um do
as we say, not as we do. We super glut
(45:55):
it and it worked. I ran to the store and
got him a finger splint and super glued it and
it's healing up great. So he's all right, well glad, right,
Oh my goodness, we will. I wish we could hold
(46:16):
the city accountable, but I guess we can't do that.
But wishing you perseverance and cocktails to survive. It's all
you need. It's the secret. Mm hmm
Episode to create a frugal one page financial plan. Welcome
to the Frugal Friends Podcast, where you'll learn to save money,
embrace simplicity, rights, and liberate your life. Here your host
(00:20):
Jen and Jill. Mm hmmmm, Welcome to the Frugal Friends podcast.
My name is Jen, my name is Jill, and today
is part two of our Radical Middle Method series where
we're kind of going through. This is something we're doing
in our Frugal Friends club membership, and we are sharing
(00:44):
it with you because we think it's great and we
want you to be able to benefit from it. And
if you really dig it, you can join us in
the club and we have a whole video series and
workbook on it and other stuff. Something that feels so attainable.
I love it when someone just says, oh, it's a
one page it's a one page report, it's a one
(01:07):
page plan, it's a one page Oh that's fantastic. That's digestible.
But also it helps us to know how can we
get these things on paper, even for some big or
financial goals that we may have just a guide and
we don't really hear people talking about this in other spaces,
and we're really excited to have created a pathway forward
(01:31):
for our community that still creates room to breathe and
tailor it to yourself. So we really hope that this
is helpful for you if you're just kind of all right,
how do I get all this in order? Yeah, and
we know that a lot of people aren't talking about
it because we just spent ten minutes redoing the outline
for this episode, because the articles about it they didn't
(01:52):
fly like. We got together and and Jill was like,
I don't get it, and I was like, neither do I.
So we just did the we in the last ten minutes,
we redid this entire outline for you, and we are
winging it. And let's see who this episode is brought
to you by. Who's winging it with us? The Spending
(02:13):
Symposium audio flash sale. Thank god, it's a good one.
So prices are still rising and that's one of the
reasons we're sharing the Radical Middle method here and now.
And it's becoming increasingly difficult to plan and stick to
a budget. We know it's getting harder and harder, and
that's why we held the Spending Symposium last month. We
(02:35):
had twenty experts teaching you their tips for spending less
and saving better. So while that is over, the full
all access passes no longer available, we did want to
give you one more opportunity to get the MP three
versions of all of our expert interviews from this year's summit,
and we're actually going to throw in last year's as well,
(02:55):
So that's almost forty interview MP three you're gonna get
that you have never heard on the show. I think
it's thirty nine interviews. So if you need more help
controlling your spending right now, check it out. We are
only offering them for one week, so had to Frugal
Friends podcast dot com slash audio to see every session
and start listening. Oh that's exciting. Yes, So if you
(03:20):
need more than the what two hundred and twenty five
episodes and forty interviews in the audio flash sale, So
here are there? There are so many. Here are some
good ones to queue up after this episode that really
align and go deeper into what we're talking about today.
(03:41):
So the first one is episode one, goal Setting and Strategizing,
and we kind of tailor it for the New Year
because that's when the episode released, but it's in general
just about goal setting and strategizing. Episode one seventy one.
Should you focus on paying down debt right now? That's
a big top still a big topic. And then episode
(04:01):
one understanding the stock market and investing with Bolos. It
couldn't be. We have a lot of episodes on investing,
but this is my favorite one about understanding the basics.
She was awesome. She really helped down in a real way. Yes,
and I love her book is one that I recommend
quite frequently, which is Understand the stock Market, Grow your
(04:24):
Money from Clever Girl Finance. So let's get into our
new headlines, but we'll go over kind of what our
when we say a one page financial plan, this is
what we're talking about, and this we literally made this
up because that I couldn't. I feel like a one
(04:44):
page financial plan is really good. I feel like it's
really attainable when you So there are different ends of
the spectrum, and we always come back to the to
the middle. But when we look at the ends of
the spectrum, we there have the advice that says do
this only this. If you do anything any deviation from this,
(05:08):
then it's wrong. So you have like the one sentence
financial plan essentially, and then all the way over to
financial planners who will literally give you a like a
three ring binder of a financial plan of stuff that
you don't really understand and will never execute. And while
I love stickers and highlighters, no one's going to be
(05:30):
able to implement on a three ring binder. Yeah. So
so these are the extremes, and so we're like, Okay,
what's in the middle, what's attainable? And I think one
page that you create yourself is super attainable. It's not
just listening to what other people are telling you to do,
but it's also not planning so intensely and so complexly
(05:55):
that it doesn't leave room for deviation. Because life changes,
people change, relationships grow, and there is and change does
not mean failure. Deviation does not mean failure, and it
more often than not means growth. Um And so a
one page financial plan will give you room for flexibility,
(06:16):
for customization and also do ability, which is what we're
very much about. I love doability and ease, and I
think we are supposed to review this. This isn't a
set it and forget it. This isn't I wrote something
on a piece of paper and it was one page,
and that felt good, and then I forgot about it.
This is to be reviewed regularly, if not sensually, and
(06:40):
so we just want to again, there's not like a
specific article on what is the Frugal Friends one page
financial plan. We go into that a lot within our
membership and we can talk more for those who are
interested in that, but we want to give it to
our broader audience as well and how it works. So
there's not a specific article that's just here's what it is,
(07:01):
and then we're going to use articles to support how
we can implement on that one page financial plan. So
that's kind of going to be the way we moved
through this episode. Yes, so there are three parts to
the one page financial plan. It's goals, foundations, and then freedom.
And so your goals are your short and long term
(07:23):
goals or even short mid long term depending on your
income and your life plan. Uh So the time it
will take you to reach those goals will kind of
dictate whether they're short, mid, or long for you. And
then your foundations, your savings, and your debt. So we
(07:43):
believe debt is neutral, but you do need to have
a plan for paying it back because that's an agreement
that you made. So there there needs to be a
plan for saving your money and then also for paying
your debt back, and then free edom, which is investing
which we do support investing while you're paying off certain
(08:06):
types of debt because time in the market is uh,
we'll save you the most money overall when we're talking
about buying freedom, because that's essentially what investing is is
buying freedom. And the earlier you invest, the less you
have to pay for that freedom, and the earlier you
get to enjoy it. So those are the three parts,
(08:28):
especially for our lower or medium income earners, this is
gonna be what's going to set you up the best
in the future is time in the market. Absolutely, and
even in today's market, I'll put that little caveat in there,
we say the same thing knowing that we are in
a very different market today than we were even a
(08:50):
year ago, even two years ago. Uh So we still
stand by that statement. So the first article that we
are going to get into is about goals, and it's
about the short and long term goals, and it's by
It's from Investipedia, and it is talking about how to
set financial goals for your future. How did you feel
(09:13):
about this one, Jill? Did you like it? Better. I
really liked this better Again, our quick pivot in the
last ten minutes is fantastic. So for me, I think
anyone who's listened to us for a while it will
I might sound like a broken record. I love tangible tips.
It's something that carries over into the mental health field.
(09:34):
For me. While there's no quick fix for all of
the different circumstances that we may face in life, having
some sort of idea of what could I be aimed
at or what are some of the tools and resources
that would be helpful for me as I aim at
well being? And this article felt like that to me.
(09:54):
Of it's not going to look the same for every person,
but it is good and benefit a shoal for all
of us to aim at short term, mid term, and
long term goals. And I even like that they didn't
make that this aloof mysterious thing. They gave some really
great examples of what could fall into each of these
(10:16):
categories for those of us who just aren't quite sure,
what does what? What would a short term goal look like,
what would a long term goal look like? What do
I need to be having my sights on? And then
what are some questions that I can be asking myself,
So that felt really great to me. I would recommend
this article. So when we talk about a one page
financial plan, I think reviewing an article like this would
(10:38):
be really useful to say. If our one page financial
plan begins with goals, and we're talking short term, mid term,
and long term, well, then here's the things to consider.
So this one from Investipedia begins with the short term goals,
and they can include things like setting a budget. Uh,
at least looking at the debt making the goal of
(10:59):
reducing I know, we get into foundations of maybe the
how to, but that can be a goal, and starting
an emergency fund maybe if you don't already have one,
and I like how they highlight that having a budget
can help you know where you're going, Like, you can't
know where you're going unless you know where you are
(11:20):
right now. I know we've got a spectrum of opinions
on budgets, and that's okay. We can hold the tension
between I don't want to ever look at a budget
or I love budgeting and like, give me the three
ring binder. We could find ourselves somewhere in the middle.
But it is important, at least at this stage when
we're doing a one page financial plan, where are we
(11:41):
right now? If we can even look at a budget
in that sense, that's going to help us know where
we're going. And so again, examples of some short term
goals could be creating that emergency fund, paying off credit
card debt. Highlighting the credit card debt because that is
the highest interest debt, most likely that we have. Back
to Jen's point that debt is neutral, but we and
(12:03):
and not all debt is created equal, So there could
be different tiers of priority within your debt payoff absolutely,
and again it will what is short, mid, and long
term for you will be customized to you because based
on your season in life, how much you earn, your
(12:23):
earning potential, where you are even, like when we talked
about like creating your dream life, that's what you have
to do before you create your financial plan and create
that separate from money. Everyone talks about like their goals
in life, and like when I hear someone say their
first goal is like financial, I'm like, but why why
(12:45):
is it? Why do you have that goal? So you
have to have your life goals first and and have
those established, and then that really does dictate what is
considered short mid term and long term. But these are
really good um ages on what to expect. I mean, definitely,
everyone should start with a budget, and that is a goal.
(13:07):
Like the budget isn't just to get you to your
goal actually being able to budget regularly and not essentially
stick to a budget perfectly every month, that's not a goal,
but to make budgeting a habit that that's your first goal.
And people so quickly skip over that, and they skip
(13:29):
right to the debt payoff or the savings, and they're like,
why can't I meet my goals, because well, you didn't
first establish a budget. That is a goal to be
able to create that habit. So I love how they
pointed that one out there. And then they move on
to the mid term goals um which is like get
(13:49):
life insurance and disability income insurance. So we love term
life insurance. We think it is very essential to a
hole a stick financial plan, and not a lot of
people have it. But you don't know you need it
until you need it. So something like that, payoff student loans,
(14:09):
so we we move from these higher interest loans um
to the kind of mid range student loan or maybe
like a personal loan or stunt like that stuff that's
lower than a credit card but higher than a mortgage.
Right now, if your student loans are still zero percent,
(14:31):
that's not included in this, but when inevitably they do
come back um or if you have private student loans,
that kind of would be would be the next tier.
And then and then they say, consider your dreams. We
already know that you want to consider your dreams first.
But I love that they actually put this in a
(14:53):
mid term goal because we often view it as a
long term goal. Is like, whatever the dream is, that
it's the long term goal, but it is closer. It
should be closer to a midterm goal. So breaking creating
your dream life plan and breaking it apart and breaking
it apart until you see what's the what's the step
(15:14):
by step? How can I not maybe get there all
at once, but I can get there in the mid
term and then see it fully into completion in the
long term, but not necessarily waiting and for twenty years
and putting it off that long. And if you listen
to our episode about creating your dream life, then you're
you're already there. You've already done this step, but yes,
(15:37):
it needs to be done at some point and should
be a part of your one page financial plan, and
again permission to revisit and change some of those things.
I know some of my goals, many of my goals
I've shifted. The core of who I am hasn't changed
that much, but the way that I think that that's
gonna look does shift. But if we've got some financial
(16:01):
planning around that, and there's room to shift it, So
either way you slice it, paying attention to our finances
and making good decisions is going to really help us.
And then of course it moves into the long term
financial goals, which is going to be part of that
one page financial plan, and this article highlights which I
would agree with. One of the biggest long term financial
(16:22):
goals for most of us is going to be saving
enough money to retire. One one common thing that people
will recommend is saving ten to fifteen percent of every
paycheck into a tax advantaged retirement account. This would be
your four O one case four three B S or
traditional IRA raw IRA. Of course, if you can save
(16:43):
more than that in every paycheck, you're all the better
off to be able to do that. But connected to
this long term goal is the need to estimate what
your retirement needs might be. There's a lot of different
ways to approach that. Of course, none of us can
totally for sure, No, we don't. Depending on how far
(17:04):
away retirement is for us, that could be that could
be a few decades, and we don't totally know what
life is going to look like in a few decades,
which is why I appreciate they say estimate. We are
just estimating. Some of that includes considering what you're desired
annual living expenses during retirement is going to be, uh,
subtracting the income that you will receive, so this would
(17:28):
social Security, I don't know for those of you who
are close to retirement, that's there for you, with those
of us who are further away, UH, t b D,
t v D. And estimate how much in retirement assets
you need for your desired retirement date and based this
on what you currently have and are saving on an
(17:49):
annual basis um. There's tons of online calculators that can
help you figure that out. This episode isn't to totally
go into how do we do that, so giving a
little bit of the overview of how would we save
for long term goals? Yeah, and we would recommend this
this part of the financial plan maybe be like a
(18:11):
quarter of the page and really just having like your ten,
your five and your one year goal. And we're very,
very into having one financial goal at a time, like
just focus on one thing at a time, and that
is going to get you the fastest results. And when
we're trying to do things sustainably, doing things efficiently is
(18:34):
really important. So having your ten year goal and then
create a five year goal based on that, and then
creating a one year goal based on that, and then
breaking it down and just working on that one year
goal and then if you reach it sooner than a year,
then you can go on and create another year goal
based on that five year But we you can have
(18:57):
like a twenty year vision for your life. But when
you start getting into goals up to twenty years, that's
when you get that big binder like financial plan and
it's not you're going to change. Probably in the next
five years, even your ten year goal probably won't be
the same. So give yourself flexibility and room four goals
(19:18):
to change, but still have that north star, um that's
pointing you in the direction of your your dream life. Yeah,
one that gives you flexibility to change your mind. We
don't have that flexibility if we've not created it. Yeah,
So the next part of your one page financial plan
(19:40):
is the saving, debt and investing portion, and so that
is broken up. We break it down kind of into
foundations and freedom. So your foundations are your savings and
your debt, and they are the things that make buying
freedom easier. If you do the foundations right, then it
comes easier to purchase your freedom. And there is no
(20:04):
one right way to do the foundations right. The right
way for you is to make it as easy for
you to buy your freedom in the future. But you
still need to plan obviously to save, to become a saver,
to say, for short term expenses, and to pay off
your debt because it is an agreement you signed that
(20:27):
you would pay it back. So it's not something that
you can't ignore unless you know, maybe there's some student
loan forgiveness which you know, which would be great, But
let's let's focus on our our entirety of our debt too.
So our next article then is going over how to
(20:47):
balance saving, investing, and paying off debt. And while balancing
is probably my least favorite word because balancing is stressful,
um and I don't think money has to be stressful.
The article does, I think, provides some good questions to
ask what do you think, Jill? Yeah, I'm just stuck
on the balancing word and can't get the balanced beam
(21:08):
out of my mind. I don't know why our society
is so obsessed with balance when if you've ever been
on a balance beam, it's impossible and stressful and usually
ends in pain. So agreed. The radical middle is the picture.
The picture in the article is this woman who has
like four hula hoops. She has to hula hoops on
(21:32):
each arm and she's just she's swinging them around like
they're balancing, and she's just smiling and laughingly. She's having
the best time in me. I would be over here
with four hula hoops, like, ah, so what do I
do with all this? I'd rather just stand in nature. Yes, So,
(21:54):
this article I think is helpful and determining what's going
to be best for you. And we're talking again about
this one page financial plan and longer term goals and
investing and once we've looked at savings and debt payoff,
where do we want to put our money? And the
question that this article is attempting to answers, save, invest,
(22:16):
payoff debt? How do I approach all of these things
almost looking at each one like a tent peg? And
where do I place them? And how do I hold
it all intention in a way that creates a nice
tent and shelter for me? Uh, I have never really
gone tent camping, like maybe once and I hated it. Uh,
(22:38):
trailers for me maybe, But still I think it's a
helpful illustration of everyone's tents are gonna look different, some
of them are going to look like an RV, But
how are you going to hold each of these pieces intentions?
So they ask questions pretty much throughout the whole article,
which for someone who's a social worker, that's my favorite.
(23:00):
Just ask questions. You don't even have to have all
the answers, just ask all the questions. So the first
one that they ask is, well, what kind of debt
do you have? If you want to know where should
I be putting my money? Am I able to invest?
How much can I invest? One of the first questions
is going to be do you have debt? And what kind?
And again they highlight not all debt is created equal.
We think it's neutral, Like we don't use the terms
(23:22):
good debt bad debt. But there are debts that have
higher interest rates on them that we would want to
pay off sooner. There are some debts that have low
interest rates or no interest rates, and so in that
case we might not need to prioritize them as much
and there could be space in the budget to be
able to invest. H. Yeah, these plans on on this
(23:44):
one page financial plan because you want to review it
every year, like around every year. Maybe less, maybe a
little more, but but you are really focusing on Okay,
what's what what are the finances do I need to
get me to that five and ten? But what do
I really need to be focusing on the next year?
So looking at the type of debt you have and seeing, oh,
(24:07):
it's going to be much easier for me to buy
more freedom if I have less of this debt. And
we we categorize anything over seven percent as pretty high interest,
and so anything over that really should be prioritized. So
this kind of goes into the next one. What's your
(24:28):
rate of interest averse rate of return? The reason that
we say seven anything over seven is high is because
a diversified portfolio is probably is going to overtime with
inflation typically return anywhere from seven to ten percent. If
you are all inequities, you're going to see closer to
(24:50):
ten or twelve. But if you're diversified in some more
conservative securities, then we're looking at seven to ten. And
that's not the best, but that's typically the the average,
and so that's the benchmark we use. Can you do better? Absolutely?
(25:10):
Do we talk about how to do that on this show.
Not much um for us to talking about how to
save money on purchasing freedom and time in the market
does that, and so that's why you want to pay
attention to your rate of interest first, rate of return.
If you have higher interest loans that severe. I mean,
(25:31):
if you're seeing seven percent in the market and you've
got a seven percent car loan, that cancels each other out,
so you want to pay off that debt so that
you can get more into the market. Um. But if
you're seeing if you refinance, and you're seeing like a
two and a half percent mortgage, um, while you could
get seven percent in the market, then that one's kind
(25:52):
of a no brainer to Or if your student loans
or zero percent right now, putting more into the market
right now it is all so a great decision. The
next question to considers do you have an emergency fund?
They just use the term healthy emergency fund? UH can
can help you avoid expensive debt. That can help us
(26:13):
determine how much we can start investing or continue investing
if we've already got some of these basic foundational things done.
Of course, what is healthy to one person might look
different for another. There's various metrics for what an emergency
fund can or should be. Some people will save three
(26:35):
months worth of living expenses as an emergency fund, others
six months worth of living expenses for an emergency fund.
Others will save UH medical deductible for an emergency fund.
So decide what's right for you. Know that your one
page financial plan can include a tiered approach to that
(26:55):
of well, here's where it's at now, but here's where
I want to get it to be. But that doesn't
mean that I can't focus on something else until that
becomes maybe the next prioritized goal. But some version of
an emergency fund we want to look at. That's a
good question to ask ourselves. Yeah, uh so the last
one on here for me that all that I liked
(27:16):
is um the obviously are you meeting your employer retirement
contribution match? So that is the first thing that you
should be doing always because that is part of your
compensation package. You if you do not take it, you're
essentially telling your employer, no, you don't need to pay
me what we agreed upon. Uh So this is something
(27:38):
that's just part of your compensation. That is I don't
even believe counts as investing when we're looking at it
on the scale of investing, but it is something you
should always be getting your employer retirement contribution match at
any time. So if you're not doing that, do that.
And the last one I want highlight on here I
(28:01):
love that it's in this article is the question of
how can you best manage financial stress? And again, this
is going to look different for all of us. Our
capacities are different, but our mental health and financial health
are both extremely important and oftentimes do influence and bear
weight on one another. So when we're thinking about eliminating
(28:24):
debt or saving or investing, we do have to ask
ourselves what's going to be the pathway of peace for us?
What is going to create the most calm inside of us,
the most assurety clarity, just just what feels peaceable to
us mentally, emotionally, relationally. And so that's why I think
(28:47):
you see so many people making so many different approaches.
There certainly could be some quote unquote wrong ways of
going about finances, but there's certainly a lot of right ways,
and they don't all have to look the same. Right
for the person who pays off their mortgage early versus
the person who chooses not to and just invest, both
can be fine. It really has to do with what
(29:08):
does financial stress look like for you, and how can
you create the most peace in the midst of it.
For many people, it does include a lot of things
going on autopilot, not needing to think about this on
a daily, hourly basis. I think anytime we need to
think about something or be consumed by something regularly, it's
going to cause stress. So this one page financial plan
(29:32):
can help with that, finding ways to put our goals
on autopilot where it doesn't have to be top of mind,
but we have peace of mind in it. This is
an incredible question to ask ourselves. Consider your own self
in this, how you want to move forward again in
a way that's going to reduce some of that stress
(29:52):
but still be helpful for you. Yeah, and I'll give
you a bit of a teaser from our episode coming
next week with Jordan Grammant where he act really gives
a really he gave me like I was very like
mind blown about how do we find out what's causing
like us financial stress and not just what we're being
(30:12):
told is financially stressful, but like, look at your fears
about money, Like what's your biggest fear about money? Validate
that and don't give into the fear, but create your
financial plan to air more on the side of serving
that fear, so there can be a balance of our fears.
(30:34):
Tell us who we are, but when we're healthy, they
inform our choices. When they're unhealthy, they paralyze us. Anytime
we can respond rather than ignore, we're going to be
better off. Absolutely. You know what I love to respond
to and never ignore. I want to do it all
the time. I'm never fearful about it. That's right. It's
(31:10):
time for the best minute of your entire week. Maybe
a baby was born and his name is William. Maybe
you paid off your mortgage. Maybe your car died and
you're happy to not have to pay that bill. Anymore.
That's bills, Buffalo Bills, Bill Clint, this is the bill
of the week. Hi, guys, I wanted to call. I
(31:31):
had two things I wanted to let you know for
Bill of the Week. UM So, I just want to
start this off. I have life insurance. I bought from
Life Insurance probably like I don't know, seven years ago.
Um So I've had this accidental plan, a life insurance plan,
for probably like twenty years. I'm thirty seven, so so
(31:56):
less than that, but a long long time. And it
was just something that I signed at my bank, and
I have had fifteen dollars removed from my account every
month forever. And I've wanted to cancel this for like
a really long time because it's such just stupid. But
I've never picked up the phone to call because I
was just dreading a call and I was always like, well,
(32:18):
I'm not gonna be able to find them the number.
I don't even know anything about the policy. Anyway. I
finally I've been I found you guys like a month ago.
I've been binging podcasts and I'm like, I should just
call because fifteen dollars a month is a lot of money.
Um Anyway, it took me twelve minutes. They didn't even
find me on it. They canceled it in two seconds. Again,
(32:40):
I have term insurance for myself and my husband, so
it was just a waste. And I'm just blown away
that it took like no time and that I should
I should have. I just I'm gonna I'm not a mathematician,
but it's a lot of money. Other than also, I
listened to this old podcast about like going out to
the state to see if you have any money, and
my husband is like a hundred and forty three dollars
(33:01):
as well sitting at the state from that podcast. So also,
I just have to get something notarized at my bank
and we're going to get a hundred and forty two
dollars just for listening to Thanks guys, Wow, I am
so pleased. If you'd like to send us a commission
for that, like the commission Friends podcast, pay fifty cents
(33:27):
to send us one dollar. Yeah, that's awesome. I love
I love it when people get their money and they
take it away from people it doesn't belong to. That's great.
And the fact that I don't have to take it myself.
I'm not Robin Hood, but the fact that I could
help you be around Robin hood is great that Jill
(33:48):
and I could do that for you. Guest, take what's
rightfully yours. Yes, we've had so many people respond saying, yeah,
I looked up with the state and turns out I
had some money sitting there. Yeah, everyone should go. That
was from our friend Lisa Rowan from the Money Hacks episode,
and everyone should go buy her book Money Hacks as
(34:12):
a thank you. Like use everybody who's found money should
just take part of their found money to buy Money
Hacks by Lisa Rowan's amazing. She does not pay me
to say that. I just And also this canceling of
if I'm understanding correctly, accidental insurance. You still have the
term life insurance, but you recognize you didn't need this
portion of it, and now that's money back into your account,
(34:36):
which is fantastic, And it's so funny. We don't listen
to these before, like this is the first time we
heard that. We just mentioned how great term life insurance is.
So thank you for for validating that and not embarrassing
us as well. If you all listening, want to submit
your bill of the week, visit Frugal Friends podcast dot com,
(34:57):
slash bill leave us your bill. If it's a bubble bill,
we love those. If it's a person, we love those.
If it's found money, we love that too. What of
them is? Just leave it for us. We love it.
If you like it, we like it. And now it's
time for we went more fun with that. Yeah, I mean,
(35:24):
I'm having a good time. I'm on that high from
that Bill of the week. I love it. I'm so pleased.
So today we are going to share our one year
financial goals. How's that sound? Chill? It sounds great. You
love this, you love it too much? Well. So one
(35:46):
of the really cool things about the membership for me personally,
because as we all know, we do this podcast and
we do our membership for ourselves because it helps us.
And I do this podcast because I just want to
hang out with you more. Jen. Yeah, we are selfish.
We we did this within our membership with our members
of creating various goals and holding each other accountable to
(36:10):
create these goals. I'm not necessarily like a goal oriented person.
That sounds kind of funny. I'm an achiever, but just
kind of whatever is right in front of me, like
I'll just work hard, at it and achieve it. I'm
not necessarily thinking five years down the road, what do
I want to do? Anyhow, it has been really helpful
to get my brain and body working in this kind
(36:31):
of way. I am a calendar year type of goal setter,
so this question is hitting at the halfway mark for
us in or in the summer, and so for me,
I'm evaluating what I kind of said at the beginning
of the year, which for me, my main one year
(36:52):
financial goal and one of the things that you challenged
us with in the membership jen was that that one
year financial goal be something that you can do with money.
That and I'm probably butchering it, so so correct me
if I'm wrong. But my recollection is what can you
do that in doing that thing helps to create more money.
(37:13):
That's my summary of it. So for me Eric and I,
having bought the house that we live in two years ago,
one of the things that I've been wanting to do
with it is to create an airbnb to bring in
more money, but I want to cash flow the renovation portion.
So this is a goal for me. Of course, it
was a vision that I had when we bought the house,
(37:34):
but there's a lot of other things that we had
to do SOO was cash flow the Airbnb renovation, so
that when that's done, it can be a stream of
income for us, an additional stream of income. This is
the one year goal. We're halfway through. We have hit
many barriers, so there's a part of me this is
(37:54):
very vulnerable to share because I don't know if this
goal is going to be accomplished by the end of
the year. You can check back in. I don't know,
but I think that that's what makes it a goal
is it feels like a little bit outside of reach
for us. Some some barriers that are outside of our control.
We have hit, mainly with permitting, but that's okay. We
(38:15):
will persevere. But my my hope is for that to happen.
And so far, so far, we're doing well. We are
cash flowing it. I just really hope that it doesn't
go beyond the ear because I'd love to allocate then
the money that we had been allocating to renovations into
some investments. But slowly but surely, it doesn't. It doesn't
(38:36):
happen overnight, and it has not been for lack of trying.
You have been trying, like a twenty ft long by
three ft deep trench across our entire house. I got
real buff in that one. Then that trench is just decoration.
The trench is still there, all of the dirt and
(38:59):
say and I dug out now has grass growing on it.
And we are just a despicable neighbor to have right now.
But I'm working on it. If any of my neighbors
listening to my podcasts, it's not her fault, it's the city. Yeah.
So yeah, so we also that. I mean, so our
(39:21):
one year goal last year was to buy an investment property,
and we did that. We completed that in May, and
now well we did a workaround. We moved and then
turned our old house to an investment property because that's
what we had to do because we don't have just
(39:43):
four dollars sitting in the bank like other investors do. Uh.
So that happened, and so now our one year goal
is to finish the renovations for for this year, finished
renovations on the rental side of our new property, because
(40:05):
we are turning part of it into an airbnb or
maybe a mid term rental. We'll see. So that is
the goal for the rest of twenty twenty two is
to finish that and uh, check again, we got we
got high home December of this year, we'll have to Yeah,
(40:26):
we'll have to share in December what we finished on
our renovations if we are able to rent out the rentals.
Have a feeling tail between my legs. At least we're
not doing anything that requires digging or permits or anything.
So it is really all on us. I will I
(40:48):
will say, well, this isn't I know. We talked about
like focusing on one thing, but this was a very
easy thing to do. But I did get Erica roth
Ira for those of you who were wondering that it happen,
and now that's on autopilot and I had hoped for
that to happen in so one thing's accomplished. And Jill
(41:08):
did that all on her own. I was not there.
She told me about that. Actually, we were on a
call with our membership when she told everyone. I was like,
what I didn't by myself. Yeah, I'm an old dog
can learn new tricks. And that's true, but it worked
for me. It's impressive because you set up a roth
(41:30):
Ira like maybe once or twice in your life, so
like every time I help somebody set up a roth Ira.
I have forgotten how did you? Because I'm not doing
this every day, so I kind of want you to
check it for me. I still am like, I think
I need to bring my computer over and we need
to check and make sure that I actually did it. Yeah,
(41:53):
I will, I will check for you than um. But yeah, okay,
renovations rental both of us where we're at. That's where
we're at. You guys keep us accountable. They will, you know,
they will. Thank you everyone for listening and for keeping
us accountable. We are sharing, we've we've put it out
(42:14):
there now, so shop shops, bad Snip Snap podcast, it's
out there. You can't change this. Once Christian edits it,
it's there. And many of you know that we have
a private community who also keeps us accountable. We got
it coming at us at all angles, and we do
monthly monthly money challenges which is really fun. Again accountability groups,
(42:35):
so not just accountability for us, but accountability for each other.
We we share the wealth there and we want to
congratulate one of our members for a big win. Christie
kW shared with us that she just completed well, she says,
just completed my graduate Certificate of advanced studies and educational
technology and new literacies. We got some some accomplished people. Yeah,
(42:58):
it's fifteen credit hours b on my masters. I was
able to cash flow taking one classes semester for the
past year and a half, and we'll use what I
learned in my current job. It will also help me
in my side hustle of online tutoring. And because I
make a little more money for every three credit hours
of classes I take, will increase my final average salary
when I retire in six years. Hashtag still got it
(43:22):
do Christie six years away from retirement and still just
crushing it. Learn and learn a new thing. That is
definitely early retirement, Christie. Christie is not. You don't know
that's going to be early retirement. Oh my gosh, awesome, Christie. Yeah,
Thank you everyone for listening. If you want to check
(43:43):
out our monthly challenge community, head to Frugal Friends podcast
dot com slash club to see what challenge we have
coming up next. Love to see you there, We'll see
you next time. By Frugal Friends is produced by Experiality Jill.
(44:11):
How is the permitting going? Um? Oh? Jen It's Eric
has gone in person multiple times to the permitting office
and gets different answers ericas I've not gone with him.
I feel like I kind of want to at this point,
just so it can be a family affair. Oh my gosh,
(44:32):
they essentially messed up the permitting. I don't want to
go into too many details because well, we don't have
time for it, and maybe other reasons, but essentially they
filed the wrong permits and now they have no record
of it. Goodness, one part of it is done and
(44:52):
paid for, Like we paid three hundred four hundred dollars
dred something like that, and we're like, well, but where
are these permits and they're like, oh, you don't have those.
We must have filed it under this other permitting thing.
It's just like there's only so much capacity and emotional
energy that we have for this part of the process.
(45:14):
I will say, the actual labor of the renovation seems
totally doable. I just can't wait till we can pick
up a hammer again. Oh and also Eric did try
and do some work that he could do without the permit,
uh and sliced his finger with the chop saw. He
like finally worked himself up to hey, I could do
(45:34):
like these things and that would be fine before inspection.
Uh ten minutes over in the Airbnb side of the
house and slices his finger with the chop saw. Like
we were debating do we need to go to the hospital.
We decided not to because you know us um do
as we say, not as we do. We super glut
(45:55):
it and it worked. I ran to the store and
got him a finger splint and super glued it and
it's healing up great. So he's all right, well glad, right,
Oh my goodness, we will. I wish we could hold
(46:16):
the city accountable, but I guess we can't do that.
But wishing you perseverance and cocktails to survive. It's all
you need. It's the secret. Mm hmm
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