I was poking around a few blogs last night looking for great articles for Rockstar Finance, and I came across this cool one by Adam Hagerman.
He was in a “thinky” mode about life and money, and decided to ask himself 11 questions regarding his finances for a little more clarity (or, to better help his blog readers find clarity). As someone who loves answering questions myself, I thought I’d snatch ’em up and share them with you too. It’s always good to stop and make sure we’re on the right path, right?
So, here is an interview with myself and my money ;) not to be confused with an interview I did on myself at the very beginning of this blog 5 years ago when I thought I was pretty clever… I hope you’ll answer these questions next.
- Is My Money Being Spent on the Things That Truly Matter to Me? Yes, mostly. Not things that are all that sexy (electricity, shelter, insurance, etc), but definitely on *needs*. With some little splurges here and there too like Starbucks or eating out to keep me sane. (Oh, and also on some investing/saving too, but not as much as I’d like these days…)
- What Was The Last Item I Regretted Purchasing? Hmm… the last item I REALLY regretted buying – which I couldn’t return (an important distinction) – was our house. I’ve made some dumb purchases here and there in between these 6 years, but that was the only one to this day that’s really holding back our finances. While things have certainly gotten better (ie. we’re not *as* underwater as we used to be), and my blog and career came out of it all (woo!), it’s the only thing that really pisses me off in my past. But I’ve slowly been accepting it and moving on – even though I know it sounds like I’m still bitter here, haha…
- What’s Holding Me Back From Taking Action? Adam talks about “fear of financial freedom” in his answer, so I guess that’s what’s meant by “taking action” here. And for that the only thing standing in my way really is having *more* time to work on stuff. Along with being better about what exactly I’m spending my time on. Hustling 60 hours/week on something important/bigger for the future is better than hustling 60 hours on maintenance – which I can get caught up into since it’s so much easier. So I personally need to be working on *smarter* use of my time over here.
- How Would My Budget Look Without Debt Payments? Oh man, if I can figure out a way to kill those 2 mortgages of ours we’d be H-E-A-V-E-N. That would be $2,200 every dang month to be invested or saved somewhere (our payments are really $1,900’ish, but we pay a few hundred more ea. month to speed up the process), I can’t even imagine… And really, you can’t separate that debt out with consumer debt since at the end of the day it’s still all DEBT!!! Which is decidedly NOT sexy.
- Am I Listening to the Right People? I hope so :) I listen to all of you in the comments, as well as other great personal finance bloggers! I get a lot more out of that than reading “real” websites or books. It’s all about the personal experience for me.
- How Can I Improve My Financial Literacy? Continue reading and learning! Best thing I’ve done since starting this blog… I was horrible at it before (I’d literally read a book once every 8 years – no joke), and now I’m constantly reading article after article. Still not so good on the book front, but hey – baby steps ;)
- What’s My True Hourly Wage? Probably $15/hour, haha… I dunno, maybe higher, but lately it seems pretty low ‘cuz I’m working more than I used to but making less ;) Luckily I love being a blogger though.
- What Can I Do to Increase My Income? Find more/better side hustles. And take more risks to do so instead of keeping in the comfy territory no matter how nice that feels!
- If I Died Today, Would My Family Be OK? Yes. Well, at least financially :) My life insurance of $350k would kick in giving my family enough to pay for funeral stuff and pay down our mortgages if they want/etc. And on top of that we’d still have our $450kish in net worth too which def. helps… Now our income would go 100% away (unless my wife figures out how to keep my blog around for a cple year!! Haha… which is on my list to teach her ;)), but the money would last for quite a while until it ran out. This is a very important question to ask yourself though. The last thing you want to do is leave your family in financial ruin as well as emotionally a mess! Get some life insurance ASAP if you have a family and don’t have any (we both have term life insurance which we found to be the best route)
- Am I Setting a Good Example For My Children? I really hope so! Having a blog on money helps for future reference, haha, but hopefully I can instill smart financial cents in our little guy (soon to be plural) through real-life action too. I can’t WAIT for him to be able to understand and talk about money! But first, we need him to TALK in general, haha…
- Where Do I Want to Be One Year From Now Financially? EXCELLENT question. Shorter goals are much easier to think about, and achieve, than longer ones generally. So, for us, I’d like to be over the $500k Net Worth mark 12 months from now, as well as a 10% bump in business income AND a 2nd salary finally from the wifey ;) As it’s been a solid 4+ years since we’ve had one while she was getting her doctorate… I forget what it’s like to be a dual income household!
Some really good questions up there to ask yourself. Especially #3, #9, and #11. You’ve got to have goals and know what’s holding you back, and you’ve also gotta protect your family in the unlikeliness of us passing on. Having literally attended a funeral over the weekend (and with everyone else dying lately, God bless you Paul Walker and Mandela!), none of us have immunity. Neither from financial disaster either, as I shared yesterday.
How would YOU answer these questions? Any get you to pause and re-consider stuff? Answer them as soon as you’re done reading this, even if just to yourself. Should only take a few minutes until the next shiny object on the internet catches your attention ;) Or, your boss.
Have a great day over there, everyone. And thanks again for the prompting, Adam!
Photo by giumaiolini
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Great questions – I have some ruminating to do!
I totally agree with the life insurance thing. If I died, there is enough money to pay off the mortgage, and a years worth of salary. Plus I have another 50k through work, so my fiancé would have some time to grieve without money stress, heaven forbid.
You’re on the right path :)
These are all things I think about on a daily basis =/
I regret buying our last house too! We bought near the top of the market then spent 20K fixing it up. When we sold, we didn’t even break even. If we would’ve waited, we could’ve bought something much cheaper at the bottom (or near bottom) of the market.
Yeah, pure unlucky with timing really… or, pure stupidness, depending on who you ask :)
I don’t think there is any bigger motivator than:
How Would My Budget Look Without Debt Payments
The power that comes from realizing how much more money any of us would have if we didn’t have debt is incredibly empowering.
I love #5 – and honestly, I think I trust 10 different blog entries by different people more than I do 1 book by 1 person, edited so that it is more “salable”.
I also really enjoy 1 year goals. When I set them, I use followupthen.com to email me in a year to see if I have accomplished them (sometimes at various points along the way to remind myself to stay on track as well).
Funny you should say that about listening to the advice of blogs than books. What seems like the “right thing to do” isn’t always right for everyone. I do think some of the PF books have a one size fits all mentality which scares me.
At least you can interact on a blog and dialogue with ppl. You can’t get that from a book unless there is something I’m missing. LOL
Agree w/ both of you!
One regret I have was leasing my luxury car then buying it. I bought it for the wrong reasons that seemed to be right then . I have been paying for it a little bit over 6 years! $525 and now $540.
A year from now I should have eliminated both car payments and that alone would free $1140 that can be put away for emergency.
We have term life insurance a bit over $260K each. If anything happens to me or my husband or both our children should be fine at least temporarily with that since we don’t have a mortgage payment and have inflow of passive income.
Ouch on the luxury car – but at least you’re ridin’ in style, eh? :)
Great questions! We are about 11 months from #4. Having an extra $2100 a month is really going to change things in our budget. #9 & 10 are important to me as well. Financially they would be set. My wife and I are trying our hardest to teach our 3 kids to not to make the mistakes we have made.
Woahhh $2,100 a mo??? Is that student loans or, even better, a mortgage payment by chance? :)
You’re welcome! I’m glad you found the questions useful.
One of my favorites to ask new clients is “what would your budget look like without debt?”. Some people feel that the question just brings them down more but I look at it as a motivator. By thinking about the future possibilities, it can help them stay on track and eliminate their debt faster.
Does anyone else have questions that they ask themselves?
What’s your favorite question to ask those rock star clients without any debt? :)
It’s actually the same question as #1 but it just has a different meaning to them.
When people have no debt, it can be easy to get into the mentality of “well, I have the cash now, so I can buy this – at least I’m not adding any debt”.
However, it’s still crucial that they are saving for goals that are in the future. One big goal that most people have periodically is buying a new car. If they’re not planning properly for that purchase in the future, they’re going to find themselves in debt again. That’s why it’s important to look beyond the present and save for the future.
I wrote up a post a while back on “How Much Does Your Car Payment Really Cost You?” that you might find interesting:
Admittedly this is a somewhat crude analysis, but I thin it’s interesting for people to see a real-world example of how much a car really does cost in the long-term.
Good point. Super easy to get in the mindset of “upgrading” everything – esp. the big boys (ie houses and cars).
Great questions to think over J, not just today but on a regular basis for many of them. I think all of them are key, but what really hits me is #9 & #10. At the end of the day, it is my family that matters and a huge reason why I do what I do in terms of earning more, saving/investing more and learning more. Thanks for giving me something to think over today. :)
Great list — glad you and Adam could bring this to our attention. I think I might just do this same thing on my site (with mention of you and Adam of course…) as I think this is a cool list of questions and it gives people more insight into the writer personally.
I think I often get caught up in writing more generic posts that don’t let too much personality show through, but I’ve found that the sites I like best, like yours, MMM and 1500 Days, just ooze personality.
I particularly liked #10 Am I Setting a Good Example For My Children? I try to do this above all else, but I sometimes wonder if my website is actually a negative for that. I spend a lot of time on it and I sometimes only give them my partial attention as I’m trying to tend to some other little thing I have to deal with on the site. Something I definitely struggle with…
Definitely share this with your audience!! It really does help everyone in some form or another :) And give the personality infusion a shot too – might help your readers connect with you more (or, worst case, not connect with you more! Haha…) At the end of the day we’re all humans on the other side of the computer, so my feeling is why not connect with each other that way vs. stripping it out?
One comment on the mortgage as debt poin #4….
My wife and I bought a house when we got married in March 2010. It was a perfect storm, perfect timing, perfect situation, exceptional value, low interest rate. We put down a 250K down payment and 3.5 years later, if we had to fire sale the house, we would walk away with over 200K profit above and beyond our down payment. So we have close to doubled our money in less than 4 years.
Now we also have a rental house, it was my wifes house before we married that we tried to sell but ended up renting. That house would be right around break even, after selling expenses, if we were to sell today and we probably lose $200 a month when all is said and done on it as a rental… but the real estate market has gone up about 10% a year recently in our area. Our monthly payment is about 2,000 on the house so it costs us 24K a year in payments, some of which is paying down the principal, but we are getting potential, and I stress potential, appreciation on a 400K asset of close to 40K.
My point is this, if the houses are appreciating, then if you sold, not having those payments would not be a good financial decision long term.
Just another way to look at the situation.
And I’m glad you shared that :) It’s helpful to look at all sides (and opinions) of a decision as big as that. So thanks man.
Some pretty thought provoking questions…hmm here goes!
1. Yes and yes and yes. Pretty much right now we’re spending a lot on the house. It’s going to be our home and I want it to be something we’re proud of. It’s a big debt to take on, but with high rents here…it’s worth buying a house that we’re paying towards.
2. Does food count? Other than house and gifts I like paying for food! I hate it when i try a new place and the food is horrible…
3. Not having enough time!
4. This would be a pretty sight to see! Most of my money goes toward housing.
5. Erm I read your blog a lot so yes? Haha. Well I don’t necessarily follow everything I read but I use it as a guide.
6. I think I’m pretty good about reading financial blogs but yea I could read more books. Have a list…need to get to that!
7. No idea…I’d imagine it’s bad because of high taxes but better considering right now I’m close to work and I usually bring lunch. I’ll have to calculate this when I have some downtime.
8. Get a raise, and/or do some side hustles. Focusing more on my full-time job now though!
9. Financially yes. We have money saved up and my husband works his own job.
10. No children!!!! I would hope that I’d be a good example down the line.
11. Higher net worth and started investing! My goals are pretty simple…accumulate more money…
It’s always a pleasure seeing you here on this blog too :)
Thanks for sharing that. I’m going to ask myself those same questions. It’s good to check in and tweak things. I’m guilty of getting comfortable myself. I’ve decided to pay some bills in full before I even get the bill. I just want to get a bill that has a zero balance on it. I’m going to hang it on my fridge and put an A+ on it. LOL
HAH! Right next to your grocery receipt, right? ;)
1. Yes, but not enough. I would rather be traveling more, but I feel like I need to get rid of the debt before I can REALLY travel.
2. I wish I never bought these shoes I picked up a couple months ago. I thought I liked them, but they are too tall for my work pants. I wore them a couple times before I realized. On a bigger scale, I wish I never bought my car. I hate having a payment, and I don’t care about cars so I’m ruining the thing so I selling it at break-even would be difficult.
3. Being 100% in charge. I could have my own tax/accounting business, but I don’t want the pressure my bosses have on them.
4. I’m a couple months away from clearing my federal student loans so I really just have the car at $237/mo. Not terrible, but I could have used that cash when I was looking at land to buy and learned I need like 50% down.
5. I listen to everyone, but I don’t take anyone’s word for gospel. It’s important to keep an open mind.
6. By following the markets better. I feel like I don’t have enough time to get up to snuff, but I could probably spend 10 minutes a day.
7. I get paid for OT so I’m not worried about working too many hours on a salary.
8. Get a higher paying job in the private sector. Not sure I’m willing to sacrifice my free time and take on huge responsibility.
9. Yes. All I need to worry about is whether my parents will have the money to pay for my funeral. One retirement account goes to them, and the other is split between the nieces/nephews.
11. Piling on savings so I can buy a piece of land and take a 6 month LOA.
Being 100% in charge can definitely be tough, and stressful, as you point out. There are days that I miss working for someone *else’s* company vs. my own every month. You get all the risk and the reward when you’re on your own. But it’s good to know what you can take and what you can’t for sure :) It’s not for everyone.
I think these are all great questions we should ask ourselves, especially 9 and 10. For people who have a family, I think life insurance is a critical component for financial health, and despite the fact that no one wants to think about the possibility of dying, we need to make sure our family would be okay should that happen. I also think it is important to lead by example when it comes to teaching our children proper financial health, and the earlier the better!