‘Sup money lovers?
My “awesome ideas” folder is piling up over here, so I thought I’d release some of them on you today to help turbocharge your goals ;) All these come from emails and comments that YOU ALL have sent over the months, so big thanks for dumping out your smarts on us! It all helps!
See if any of these ideas stick with you:
#1. The financial notebook
This one comes from Sarah who shared it on Millionaire Day this year:
“I started keeping a financial “notebook.” I write in it every time I do something that moves me closer to the FI mark. (Ok, so I am rather liberal with what counts… reviewing the kids’ 529s counts, as much as paying an extra $100 to the debt monster.) Flipping through it helps keeps me motivated in the dry spells and reminds me when it’s time to review some bill or policy!”
So pretty much, a financial diary. Which is much more juicier than a normal one, if you ask me!
#2. An awesome way to charge your kids rent ;)
“I am going to provide my kids a (mostly) judgement free place to live when they are done schooling. My only Caveat is I will charge them rent, and that rent will be in the form of proof that they are maxing their 401(k) and IRA, and investing 50% of their net pay. As long as they do that they can live here ’till they get married.”
Another great benefit: they’ll be able to move out faster with all that money saved! ;)
#3. Chart your net worth progress against your goals!
LOVE LOVE LOVE this from Bill Furst:
“I wanted to pass along a neat little tracker I put together that I use monthly (now, and previously just yearly) with my own net worth updates. It basically tells me that I am on track for my retirement goal ($$ and time) with a visual chart. The larger the green section, the more ahead I am. You just input in the grey boxes and the yellow parts calculate for you.
I filled this in with your stats dating all the way back from 2008… I did yearly from 2008-2015, and then monthly from 2016 on. Line 8 is your historical net worth amounts. I don’t know what your time line is for your cool $1M, but if it’s 2020, you’re ahead of the game.”
So smart, right? Looks like the first year and a half I was falling short of my goal of “a million,” but from there we took off and are set to hit it earlier than expected. I really like this because it gives you a super fast idea of how well you’re doing or not in relation to your OWN goals and not anyone else’s. And it’ll now be yet another addition to my sturdy spreadsheet I’ve been tweaking over the years – woo!
I’ll have to make a template of it one day for y’all, but for now here’s the spreadsheet Bill created above for any of you who’d like to copy/test it out yourself: Net Worth Comparison Chart
Thanks Bill! (And your wife is right – you totally need to share your thoughts online somewhere! Start a blog already so we can check out all your other ideas you’ve got brewing :))
#4. “How much freedom will this cost me?”
Great way to think about all your purchases, by Free-Range-Nation.com:
“I ask my clients to think carefully about every purchase, and ask themselves how much freedom do they have to give up to work for someone else for this item? 15 mins … ? One hour… ? One day… ? One week… ? One month… ? One year… ? And then, is it worth it? If it brings tremendous value or return on investment, go for it. If not, sit on it awhile. Then, when they decide not to make the purchase, I suggest putting that amount into their Freedom Fund, or FU fund, as many like to call it. How about the Middle Finger Fund to keep the fun there and the profanity out. :)
#5. Pay enough extra towards your mortgages to see a $1.00 decrease every month
Another interesting idea by Richard, in response to staying motivated paying off your debt:
“One of the things that made it simpler for me is focusing on a small detail. I call it my magic number: $310. That is the number (rounded up to next $1) at which the extra principle payment reduces my monthly interest by one dollar. It is great to know that by paying that extra amount, all my future payments will include $1 more principle, and $1 less interest. It’s a benefit I can see on paper. I can also see the compounded effects of making those extra payments over the years. It soothes the number crunching addiction I have.”
I used to love seeing the interest portion of the payments going down by a dollar too. I never calculated “my number” to make sure that happened every month, but I did round up to the nearest hundredth every month – for both our mortgages – which sped up the debt killing immensely.
#6. Visualize your debt progress!
This also comes from Richard above.
“For the visual reminder, we use a picture of Walter’s Wiggles on the Angel’s Landing Trail in Zion National Park. Every few payments results in another marker placed on the trail. When the markers reaches the top, the mortgage will be gone!!”
Here’s a picture of Walter’s Wiggles, in case you were wondering what the heck it was like I was :)
[photo by Joshua Eckert]
#7. Another “physical trigger” – the fridge!
“My wife and I have always been “goal setters” but last year at this time we made a pact to get things down on paper and put a due date on them. We decided to keep ourselves honest and post the list on our refrigerator on bright green paper! A couple of things happened:
- It was a constant reminder of what we need to accomplish
- Our friends and family were constantly asking us about our goals and would comment when they would see another thing crossed off the list
- It was A huge motivation when we would see things getting crossed off the list… it would definitely fire us up to tackle the next one.”
If you want to see what their 2015 goals were that they hit, you can read the full comment here. Or check out 20 other triggers to hack your life and money we’ve previously shared.
#8. The Money Circle
Here’s an interesting one from Twoee:
“My mother in law challenged me to try her way of saving. A group of people get together and say they will each put it a certain amount of money per week (ours is $50). One person collects the money on the same day every week. Depending on the amount of people who choose to do this is how long you pay for. It also determines how much you get. Everyone gets to choose when they want to get there money. Our time is 25 wks for a total of $1,250. There is no interest on this but it does teach you that you have money to save.
I didn’t even think I had the funds to do this. I work part time and my husband had just been laid off. Well, I am proud to say I have been saving $200 a month since Jan of this year! I have paid off more than 50% of my credit card debt and all of my bills are current and on time. This is major motivation for someone who had nothing 7 yrs ago.”
Great for accountability for sure! Especially if all your friends/family are doing it along with you. I’d just make sure you can really trust the people collecting it though ;)
#9. Track all your transactions to the nearest dollar
Here’s one from Vicki:
“I’m sure other ‘old’ people do this already (I’m 40)… but I still use my checkbook register and every purchase gets rounded up to the nearest dollar when I log it. So I eventually have more in my checking account than I’m showing in my register.”
Whatever it takes to keep more padding! I can’t say I’ve picked up a checkbook register in at least a decade or two, but I do love the overall idea with this. And even more so if you then invested those round-up amounts through apps like Acorns so they keep growing!
#10. Try a “financial fast”
We’ve featured this idea from Yolanda a number of times, but always a great reminder as it was one of the biggest game changers for me and my money too. Highly recommend!
“Right now I’m in the middle of a financial fast as I’m working on becoming debt free. A financial fast is when you only spend money on necessities. Rent/Mortgage, Utilities, gas, groceries, etc, and eliminate spending on things such as eating out, habits, or anything not required to live. The purpose is to find out exactly how much money your are spending and how much you can afford to save that could be used to become debt free, save, or invest. I love it so much. I think I’m going to do it again next month.”
#11. Start making “To-Done” lists!
Left in response to our “To-Don’t” List idea we blogged about last year :) By Chris:
“I learned several years ago that instead of creating a To-Do list at the beginning of the day/week and then feeling down when there are things that you did not complete, it is much better for me to complete a To-Done list at the end of the day/week showing all that you accomplished.”
Hope these help! Leave any of your own ideas down below that’ve worked well for you too… Sometimes the simplest thing can change someone’s life/finances!
PS: You’ll be glad to hear that my email wrangling is still going strong from earlier in the summer’s E-shredding :) Gotta pay attention to the electronic stuff just as much as the physical clutter!
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I love seeing the different methods of madness to tackling debt and savings. So much of the game is psychological that by the time all this money madness is wrapped up we could be certified shrinks. Just gotta find whatever routine works.
I drive a beater car (1997 Mazda Protege). I bought it for $1500. I could easily upgrade, but I keep reminding myself that this car is only costing me $0.14 per mile, compared to a brand new car that can eclipse $0.40 per mile.
You’re making me miss my ’93 Caddy, R.I.P.
We are on the verge of buying a car to replace our disgraced VW diesel. I keep wavering back and forth on how much we should spend. On the one hand I would love to only spend $1500, but I also want a nice, reliable car for my wife to drive. It’s a tough call.
80’s and 90’s were the golden age for cars in my opinion. Someone mechanically inclined can keep a reasonably reliable car from that era on the road indefinitely for a tiny fraction of what it costs to buy a new car today. A few years ago, I bought a ’91 Miata (totally worth it) but at the time, I considered getting a much much newer car. Since then I figure I’ve saved $26,204 as estimated below.
Sales Tax $130
4yrs Excise Tax $200
4yrs Insurance $2640
Sold hardtop -$1200
Oil changes $385
Head Gasket $165
New Car budget at the time: $20k
Sales Tax $1000
4yrs Excise Tax $3700
4yrs Insurance (full coverage) $5760
One caveat is that I do enjoy doing my own work on cars and some of the repairs performed would have been significantly more expensive had I paid to have them done. That said, I’d bet more people would be willing to learn a thing or two about cars if they really did out the math involved.
Absolutely beautiful. And all the skills you learn just help you out forever as well! Double bang for your (non) buck! ;)
Lot’s a creative ideas here. I’m digging #3 and #7. I like saving all of your receipts for a period of time a month or two and keeping track of all of your spending. Review them and you might be surprised where some of your money is going. You might find leaks, routines, habits that you were unaware of that could be costing you money.
I’m big on using many of those such as the to do lists and the reminders on the fridge. We used a white board and would set goals and reminders and even savings competitions to make it fun. Thanks for the post J$
Great use for white boards :)
I love #2 – what a great way to instil great money habits and incentivise your kids to keep at it.
As for what we do – we count our dollars in pesos – because we are planning a long stay in Mexico in 2017. So if we can save $5 on something – that’s actually around 65pesos to the New Zealand dollar. Which buys a very nice lunch for all of us in Mexico! Same for earning overtime or any other little saving, we think ‘that’s a lot of pesos’ and it motivates us more.
Haha…. I like that.
Great list, looking forward to playing with Richard’s net worth vs. goal graph. I do something similar already but it’s only tracked on a yearly basis and with numbers and percentages, not on a graph that might be faster to read and be motivated by.
Some of the things that we’ve done to wrangle in our finances is that I have a spreadsheet where I literally track every dollar that we’ve spent over the past 6 years (starting shortly after we got married). It helps us to have accountability (to our spouse and ourselves) for every purchase we make and a reminder about what we have spent money on over the past month. I think that this has been one of the biggest factors of our ability to save. No more wondering where all your money went.
I also keep track of how much we make from our investments each month. I figure that I need to be able to consistently be making roughly $2,600 each month before I can quit my job so it’s nice to see how I compare to this number each month even though I’m still a long way from being able to expect that amount of return from my portfolio.
Nice!! I bet you find all sorts of interesting trends tracking every last transaction like that. Have you ever summarized it all and put out a master – nerdy – numbers post on your blog yet?? You know we’d soak up every word of it! :)
Thanks for putting these together J$ – interesting to see the creative ways people set/track goals to keep themselves motivated.
Nice work on your goal progress, J$.
“Stay green.” I love the double meaning ;).
I love these ideas! Regarding the mortgage, we found a spreadsheet online that can show you how much interest you’ll avoid with different inputs, and it was very motivating for us!
Probably my favorite is the rent-free arrangement for adult children. I think most of the stigma surrounding adult children living with their parents is due to financial irresponsibility (of course there are exceptions). This is such a good solution to that.
I once had a conversation with my dad during my failure to launch years. I’m like rich people have 3 or 4 families living at home. He would ask me were I came up with that I’m like Dallas, Dynasty and Falcon Crest. (Oh the 80’s). But being serious here, I wish I had saved more money when I was living rent free.
I also love #2. My son is only 3 so it is not likely I will remember these details when he graduates from college. In addition to this, I’ve heard of people charging their kids rent in the amount of a couple hundred dollars a month, not a lot, but enough to motivate them to move out. The best part, you don’t tell your kids your actually saving that money and when they finally decide to move out and they find a place, you give them all the saved up rent money.
OOOOH Yes!! I like that idea too – a lot!
#2 is an awesome idea! …too bad it will be another 17-22 years before i can try it ;)
Not sure i can charge an 18 month old rent…
Man that guy Paul who wrote #2 is really smart…..I hear he’s extremely handsome too. Also, incredibly humble ;)
and his personal hygiene is above reproach
He may be somewhat humorous as well but so far that is just hearsay. ;)
I kinda wish he’d adopt me so I can save more :)
I wish he would adopt me too, I heard that to gaze upon him is like looking at a majestic unicorn flying over an endless star filled sky light up by the happiest thoughts known to man.
I love these ideas but feel really stupid when it comes to calculating things like compounding interest, etc. Any idea how to actually do #5, especially when your mortgage includes homeowners insurance & PMI?
Chris, the home owners insurance and PMI are constants in the payment. I know they change one a year or so, but for the most part they can be ignored in the calculation.
Take any two consecutive mortgage statements say June and July. Look at the interest and principle paid. Use the statements to find the difference in principle on the July statement. Don’t be surprised if it is only three or four dollars. Divide the amount of interest paid in June by the difference in principle seen in July. If the difference is $3.00 and you paid exactly $1,200 in interest in June, then the magic number is $400.00.
I believe the equation would look like this. (any math geeks out there want to improve this? It would be welcomed)
Annual rate / 365 = daily rate
$1/(daily rate * number of days in month) = magic number
I am always collecting great tidbits from the FI blogger comments – thanks for shining a spotlight on them!
I don’t have any kids but I totally agree with Paul and his way of “charging” his kids rent. I wish my parents thought of that! My mom did as Tonya above mentioned – a small rent er month and gave me 50% back when I moved out. Kind of a win win for both of us!
As for #3 – I’m terrible with graphs and charts but I would love to see what my financial plan looks like on paper beyond my spreadsheet. The visual Richard put up speaks to me!! Now I see a change in the course of my morning ahead…I must learn to design this chart now… :)
Do it!! Copy and paste it into your own spreadsheet and play around until you get it the way that works best for you :) I’m totally doing it too.
Pretty inspiring! Especially from Twoee. I love seeing life changes blooming out of little changes. And I’m totally going to make my kids max out their 401k for rent. I wish it hadn’t taken me nine years to realize I should be doing that!
#6 is pure awesomeness
It’s a beautiful hike!! The wife wants to go again and drink a bottle of champagne at Scout Lookout, just above the Wiggles, after the mortgage is paid off. It’s as far as she will let me go hahahaha the last half mile to Angel’s Landing has a chain to hold onto so you don’t fall off.
Smart wife ;)
Lots of great ideas here! I’ll have to try that net worth graph myself. I also love the rent idea for your kids. I had a relative that “charged” her children rent and put it all away in savings for when they moved out. But I like the idea that the kids are responsible for doing the saving…it gets them in the habit for life.
That is a good point on the *habit* forming. Especially if they get it all automated and used to living on less! Will be much easier to stick to once they’re out of the house, at least until all their friends start tempting them again ;)
I love Bill’s chart showing net worth progress against goals. It can be super inspiring to have a visual like that.
I like #3, tracking your net worth progress vs goal. I started doing this only a few years ago, but I haven’t made a chart yet. So far, our investments have been doing very well so we exceeded our goals. I’m scared of the next big economic speed bump, though.
Ooh, I like the “To-Done” list! I guess that’s part of why we blog right? We do a year in review, and goals and stuff.
Just paid down about $10,000 in mortgage debt this week. Feels GOOD!
Way to go FS! Five figures! Now that’s gotta feel GOOD!
#2 & #3 are the bomb as far as new/innovative ideas. Way to show the way towards independence on two very different fronts.
As for #4 – the “how much freedom will this cost me” is powerful in the way it can really change how we think. And, the more power we feel we have and accumulate over time in the form of “liquid courage” the better the decisions we can make about our present situation and our future. The belief we have scarcity of stuff and/or money only leads to more scarcity.
Related: The best negotiation tool is when you don’t need what you’re negotiating for. Everything we’ve negotiated over the last 5 years (real estate, job, car, other stuff) has been from a “we will walk away if we don’t get the exact price we want” position and it’s been eye opening. We’ve saved tens of thousands just because we have the financial wherewithal to be able to set our “walk away” price (and trust me, they either call back after having turned you down or you end up finding an even sweeter deal). We’re doing this very thing again later this week on a new real estate opportunity. We get it at the right price for cash & no conditions = great. If not, meh…there will always be another.
Such a beautiful position to be in – totally right on that!
Love Paul’s rent idea! Great way to get the kids started on the right foot and pointing in the right direction.
I plan on doing something similar with my kids but when they are younger I will give them the option to deposit their money into a bank account or an investment and I will match their deposit. If they choose to spend their money they get nothing. Basically like a 401(k) simulation but much more generous.
Yes! Solid as well – I think I’ll steal that from you :)
Here’s another good one, always think of purchases in terms of life energy required. AKA YMOYL. Wanna new $40K car? Sure, lets see thats 1320 hours of my life energy after taxes or 33 weeks of work. Nah, I’ll just keep this one and retire 33 weeks earlier, thanks.
Haha, indeed indeed
In South Africa we have a term for #8. It’s called a “Stokvel”. The group even hold a monthly party (nothing flashy).
COOL!! I want to attend one of those parties!
So here is one thing I have done and has helped in savings and paying attention though I admit sometimes more successful than other. I normally don’t carry cash, but I started carrying cash more in the past year and every time I ended up with a crisp Abe Lincoln(or not crisp) I would put it in a jar. Its kind of like a cash emergency/savings fund. Total since last year even though I had to dip into the emergency part, is about 1100 although since my dip I am back to about 6-700$. I enjoy this because, hell who doesn’t like to count cash.
YES! AGREED! Really sad it’s going away as I find it’s much harder to spend than w/ credit too. Which of course saves even more of those beautiful green backs!
Thanks for stopping by – love seeing all the tricks people are up to :)
Number two is an awesome idea and I might actually do that instead! I love the emphasis on helping them while enforcing the need to be saving for their future.
I did The Money Circle (#8) and it was awesome for earning some extra money (because we had an option for someone to buy in and get paid interest for someone who wanted to claim it early) but the very last round ended badly for me because someone betrayed my trust. Long story for another day, if I can bring myself to share it.
That’s the part I’m afraid of :( It could get ugly, and fast, if one person decides to be shady!
Yeah, interestingly, our circles were nearly 60 people and no one ever got out of line over the last 15 years that I know of. The shady thing was a personal betrayal. I’ve rewritten it about sixteen times but haven’t shared yet.
To-Done list is a great idea! I think I can both, so basically I can see what to accomplish and what has been accomplished. I know this is fulfilling in the end and encouraging to do every week.
My mom charged us rent but did not give it to us upon moving out, rather saved it towards helping out with down payment when we each decided to buy. Mom rent was also a little more flexible than being due on the 1st, so if I got paid on the 5th, things were ok and it gave me time to build up a budget and surplus to be able to pay on time when I did move out. :)
sounds like it worked out pretty well :)
This is going to sound incredibly lame, but how exactly do you calculate #5 to figure out what it takes to lower your interest $1 a month?
Not lame at all – it’s a great question!
Check out comment #25 above in response to someone else asking the same :)
I love all of these methods, particularly the one where Richard worked out enough to reduce the interest amount by an extra $1 each time, that’s awesome!
There are so many ways to do it, but as long as that debt is pulverized then it’s awesome.
P.S. Walter’s Wiggles looks like a really awesome place.
I am going to try to go on a financial fast on eating out starting next month. I would like to cook more meals from home.
DO IT!!! Would save so much (and prob eat better too!)
So many ideas to be better financial lives! I love the one about charging your kids rent, I had never thought of that. It sounds like a double win for the kid ;) also a great idea by Vicki, I’ve stopped tracking my dollars to the penny and I think that hurt my finances a little bit because I don’t know exactly how much of my money is going out, time to slowly make it a habit!
I love a Done list! Seeing what I’ve accomplished helps to motivate me to add to the list.
Oh, I’m stilling #2 for sure! My kids can thank me later! This is an incredible idea:)
I’m never going to be the person who tracks my expenses to the penny. Don’t have the patience for that over the long term. That being said, there are some great ideas here. I especially like 2,3, and 5. First 2, is hilarious and it is a fun way to teach your kids how to save and prioritize getting things right. My mom always made me contribute earnings to a retirement plan when I was a teenager and it had a huge impact shaping my mentality into the frugal minded, investing focused a**hole that I am today. 3 is awesome because of the simplicity. Charts can be powerful and seeing how you stack up against an obnoxiously large red bar would motivate me to make sure that my value never, ever dips below this amount. Lastly, #5. Homeowning is the biggest debt most will ever incur. We all know the math that shows how much interest can be saved by paying down early. Extra payments to dropping it down a $1 is another easy, catchy way to get ahead of your mortgage. I love it!
Thanks fr the read!
It’s hard for me to track all pennies too, but I def. need to start doing it again. I’m much better in phases (Expenses getting too high? Time to track again! All good now? Let’s take a break… for years :))
I’m honored to be on this list! I really like the rent idea for children. I know a woman who is 42 and is still living with her parents and has a teenage boy. I always wondered why the parents didn’t ask her to pay ‘rent’ and then just stick it in an account for a down payment, or cash payment on an affordable condo.
Great ideas. Thanks for sharing. However, I have hiked Angel’s Landing in Zion many times and the picture on #6 is not of Walter’s Wiggles. It is of some switchbacks before you get to Walter’s Wiggles on the Angels landing trail. Here is a link to a picture of the actual Walter’s Wiggles switchbacks. https://www.bing.com/images/search?q=walter%27s+wiggles&view=detailv2&&id=001F172919B9A1899286B340A94402E85762A061&selectedIndex=4&ccid=glem5ISl&simid=608046359532274658&thid=OIP.M8257a6e484a5ca4b6c9ea5258937bcfcH0&ajaxhist=0
I really like the “how much freedom will this cost me?” I use the weekly cost x 752 or a monthly cost x 173 to find the true cost of a reoccurring expense over 10 years (assumes an average yearly 7% return if the money was invested instead). Then I compare that dollar amount to how many weeks, months, or years that expense will cost me.
I’d probably never buy ANYTHING if I did that, haha…
So many great ideas here! I’m definitely going to implement the mortgage interest one.
Let us know how it goes/feels once you’ve been at it! :)
REALLY nice list J, there are too many excellent suggestions for me to choose a favorite. I had a second look from the perspective of ‘how many of these have my wife and done?’ I think we score 6 of 11, but one or two don’t apply. So we have work to do! :)
Sounds like you married a smart wife ;)
These are all fantastic ideas. I didn’t even think to start visualizing our net worth! I’m actually going to tell Mr. Picky Pincher to get on that right now! It’s hard to feel good about your net worth until you’re actually in the black, but it gives us an actionable way to see how all of our hard work is paying off.
Glad you found helpful :)
Love #2. Thought of the same idea for my kids. Great way to incentivize them to save (ie free rent). Another twist on the same theme could be applied to student loans. For every dollar they contribute to 401K, etc., I will pay down their student loan by the same amount.
Great one too!