Happy Spouse, Happy House

MOVING IN

One of the biggest challenges of being single and managing your finances is that you don’t split your living costs with another person unless you live with a roommate or a few. Managing your own money involves more creativity, drive, perseverance, and self-discipline. The good thing about it is having the independence to make your own decisions on your life and money.

When you live with your significant other, you have two key advantages: 1) You’ve got two incomes that contribute to living costs; 2) You have a combination of strengths to work with. When a couple unites their income and money management skills they can be unstoppable with this winning combination.

Uniting forces and income can also pose many challenges, especially since we each have a unique relationship with money. You might be okay at budgeting, yet your spouse might be hopeless with money. You both could be terrible at money management. You might disagree entirely with your spouse and have very different ideas on how money should be spent. The worst is when the spouse with worse habits has greater influence over the other’s habits or efforts; from there develops resentment or a dynamic of enabling which will sink the household’s finances.

I never want to fight over money with my man, JP. I had seen plenty of that growing up and I know it gets nobody anywhere. Since my biorhythms are obsessively in sync with the days all the different bills are due each month, I’ve always been the one to budget and do all the banking. This seemed like a workable situation until our needs shifted and called for further action.

When we both started trading stocks, we scaled back on shopping and going out so that we could commit more cash to buying stocks. Life felt more frugal because on the surface our spending activities changed; in reality the amount of spending didn’t. As the one paying the bills, I became stressed out from knowing things were heading in a desperate direction. When I tried to make suggestions for improvement, the conversation got tense, and at times, confrontational. I avoided talking about what was really going on — until things got so frustrating that I had no choice but to somehow get JP on board.

Instead of trying to win through argument, I decided to let the numbers do the talking. I printed out all the statements from our banks and credit cards over the previous six months. I made a spreadsheet that divided up our spending into housing, utilities, groceries, alcohol, healthcare, and entertainment, and I tallied the spending for each category. It became very obvious that in lieu of going out for fun, we were shopping more online, eating too much takeout, and drinking a lot at home instead. When we sat down to analyze the numbers, we were both humbled and quite embarrassed with how far we had let things go.

What happened after that, I didn’t see coming. JP became an unstoppable force in minimizing our household spending and he revealed his genius at making a dollar stretch. He got busy looking for the cheapest discount brokerages to trade with, got rid of unnecessary data services, and basically found a way for us to trade stocks the cheapest way possible. All our bills are lower than ever now thanks to his charming persistence in negotiating lower rates with our various service providers. JP also has an uncanny skill of remembering the prices on everything he sees, so he knows where to get the cheapest of anything. He became the rewards points king and we always get money back on things we regularly spend on. He sold everything in the house that we didn’t need in yard sales and on Kijiji. I can go on about his many strategies, but I’ll save it for my ‘fun’ancial tidbits!

Now, we use our combined skill set to optimize our money management. While I do our quarterly budget projections, JP figures out a way to cut the costs down further on those projections. Doing this has also enhanced how we work together in building our investment portfolio.

We have so much respect for each other’s personal ambitions and have made a lot of sacrifices for the other to make these things happen. There were times when it looked like we’d have to walk away from trying to accomplish these goals (such as learning how to trade stocks and writing my book), but it took a united effort with managing our finances to make these possibilities become realities. We still are a ways away from where we want to be financially, but our confidence lies not in how much we have, but in being on the same page with how we manage our money.

The glaring truth came to surface from a few monthly statements and a telling spreadsheet. We can convince ourselves to believe whatever we want to hear, but the numbers don’t lie. You and your spouse just have to be ready for the truth and have the will to evolve your situation TOGETHER. 

From Binge Watching to Betting

OB with wordsLate last summer, it got too hot to go outside, so my man, JP, and I stayed indoors and watched a lot of movies and shows. We had heard Orphan Black was really good, so we borrowed the DVD from the library to check it out. 

The opening scene of the show marked the point of no return for the lead character, Sarah Manning, and it was the same for us. We were hooked. Each time we sat down to watch Orphan Black, we found ourselves in fight or flight mode — the experience was stressful, yet thrilling. We got so emotionally involved that it was nearly impossible to be in a neutral state before and after watching.

By the fifth episode, JP decided to de-stress by taking a relaxing walk to the gas station (the only nearby store) and he bought a bucket of our local dairy’s popular ice cream — a seemingly great way to soothe spikes in stress hormone levels. So it became our new thing to borrow the next DVD of Orphan Black and get a bucket of ice cream which, of course, was totally fine as it was ‘local.’  

In the short time it took to watch the first three seasons of Orphan Black, I had gained nearly 10% in body weight. We had also developed a fiendish unstoppable appetite for that rich, addictive ice cream. The only thing that prevented me from eating more of it was a horrific blistery rash that erupted around my mouth — binge eating dairy had triggered an old lactose allergy I kicked years ago. It’s an understatement to say that I was a physical mess by the end of the summer.  

Since then, I was never able to exercise myself fully back to my pre-Sarah Manning weight. I’m still considered to be at a healthy size and weight range for my age and height, but I know I could and should feel fitter and I really miss wearing a lot of my clothes, almost half of which have gotten too snug. I eat ice cream on rare occasions now, and I know I could be healthier by exercising more often and drinking less alcohol. 

I read that people generally respond to incentives. People will be more successful at losing weight if they win money. I’m not competitive, and instead, I get this weird urge to shut down when I’m around competitive people. If you have to compete for victory, I’m the last person you want on your team. I always manage to convince myself it’s not worth the effort for the small chance of winning with or against others who want it more. However, I do hate losing something I already have (other than unwanted pounds), and that something is money, no matter how much it is. If you want to see hulk-like anger, watch what happens when I discover extra service charges in my bank account or on my bill.

So this week, I went on stickk.com and signed up for a weight loss challenge. On this site, you can set up any challenge you want for yourself and you have to give them your credit card number. I designed it so that my challenge is for me to lose a realistic number of pounds in two months. If I fail to reach my target weight by the end date, I have to pay them the amount I agreed to lose, which is $80. It’s not much to lose (some people have thousands on the line), but it’s enough to royally upset me. I also have to report and meet a gradual weight loss target each week. You can have a referee to report your progress to or you can report based on the honour system. Betting against yourself seems odd, but I see this as a way of investing in my health, which is a form of wealth, after all.

Where does the money go? When you set up your challenge, you can decide that the money goes to someone you don’t ever want to lose a bet to, which will really motivate you. Or you can lose to the StickK people and they will pay your money to a charity of THEIR choice, not yours. I never want to promote gambling, but this form of betting is not based on some random win, it’s based on your desire to make your life better. There is no randomness or limit to your will to achieve what you want. 

Never underestimate the power of loss aversion. Just don’t let it prevent you from investing because you can reduce the risk with strategic asset allocation. Instead, use that aversion to loss to hit your goals if you want to lose weight or quit smoking–anything you’ve been struggling to achieve. In eight weeks, I will reveal whether I lost $80 to the StickK challenge or not. Wish me luck!

Thanks a lot for being the most binge-worthy show ever, Orphan Black! (I love you so much.)  

 

 

 

Investors Need Goals & Goals Need Plans

About four years ago, my friend Monica posted on FB a quote by Antione de Saint-Exupéry:

“A goal without a plan is just a wish.”

This quote has guided me since. I had many wishes that never came true because I did nothing about them. Some I actually followed through with because I came up with a plan: I determined what steps I needed to take, the possible costs involved, the amount of time needed, and whom to seek advice and support from. I didn’t always end up with exactly what I was initially going for, but because I always got something out of shooting for the stars, I found I enjoyed taking chances on new opportunities.

Yes, you need money to invest, but not as much as you might think in order to start. Another thing: Money isn’t the only thing you need for investing. Successfully managing your money involves the following actions:

  • Setting goals
  • Seeking professional advice
  • Making a plan
  • Regularly setting money aside for your goals 
  • Educating yourself
  • Staying on track 

This seems like a lot of steps but it doesn’t have to be a very in-depth process. The most important step is to set your goals. You need to know what you want and why you want it. Of course, everyone wants to invest to simply have more money for all the things we want in life. However, having specific goals helps you focus your intent and direct your money. Without goals, it’s very easy to go off track and neglect your efforts–you’ll remain in a state of wishing for longer than you want.

Over the years, my man and I have put together a decent home gym with a library of workout DVDs which I follow (or else for an entire hour, I’ll end up curling 1s while walking zoned out on the treadmill). I have a lot of Jillian Michaels workout DVDs because her tough-love yelling motivates me while I whimper and sweat it out. She shares my disdain for hauling ass to the gym (though my gym is just downstairs), but she works out not just for the numerous benefits of exercise, but in order to live a long healthy life. Regularly, she loosely quotes Nietzsche: “If you have a WHY, you can tolerate any HOW!!!”

I’m a reluctant exerciser. However, as of the last decade, it’s become my standard practice to workout two to four times a week. Arthritis runs in my family, so I’m motivated to exercise and eat healthily to reduce its severity in case I ever get it. Without this reason, I’d succumb to laziness and eating chips (my fave!) all day.

On a personal level, I tend to draw a lot of comparisons between exercising and investing. When I put in the time to exercise, I’m investing in my current well-being and in my future health. Today’s pain-in-the-butt efforts lead to short-term and long-term benefits. Investing is another form of exercise. You part with some of your money today to make it grow in the meantime, so you that can use it for a bigger goal in the future. When you invest, you’re making a statement with your money — you’re saying that your goals and life in the future are important to you.  

Set your sights on your goals and get focussed. Want that house. Give your kids a good education so they can build great careers for themselves. Enjoy a well-deserved vacation. Have a comfortable, rocking retirement. Know what you want out of your life and realize why it’s all worth it.

After you decide on your goals, get help from experts and don’t be afraid to ask them all kinds of questions. They’re there to help you create a plan to tackle your goals. Your plan is there to support your ambitions and to guide you. Make your plan realistic so that you can actually work with it and still live a balanced life. Work your goals into your budget. Dividing your income into bills, your goals, and leisure will be a no-brainer after a while. Picking up a book with investment tips and following your favourite financial blog will be a fun and interesting pursuit, even a passion. As you check-in on your investments from time to time, watching them grow will inspire you to do even more for your long-term plans. This will all become part of your standard practice. And hopefully, you’re exercising regularly too. Health is a form of wealth after all!

 

Jillian

Me at a Jillian Michaels talk in 2013