Creating a Money Mission Statement

Tanja Hester’s great book ‘Work Optional’

If you’re like me, when you discovered FI/RE you wanted to be financially independent as soon as possible and started cutting everything that you could from your budget, maybe to the point where life became miserable. As the saying goes, it has to be more than just getting to the destination, you have to enjoy the journey along the way. How then do you make decisions about what to spend your money on and what you can do without? How do you have enough in your life to make it enjoyable, but avoid spending on things that you probably wouldn’t miss that much? The truth is this is probably going to look different for everybody.

Tanja Hester, in her book ‘Work Optional‘, suggests creating a ‘money mission statement‘. This starts with looking at your mindless spending, which may have come about as a result of lifestyle inflation. If you think back to when you were a student or when you got your first job and compare that life with your life now, how is your spending different? What do you spend money on now that previously wasn’t part of your life? Do these purchases really enhance your life or have they just become a habit?

Tanja goes on to repeat a point which is the focus of ‘Your Money or Your Life’ by Vicki Robin and Joe Dominguez. Basically, money is a reflection of the time that you spent earning it. If you get paid £20 an hour and you buy a handbag for £100, that cost you five hours of your life. If you look at purchases in this way, as a function of your time on this planet, you may think twice before you click ‘buy’ on that Amazon basket next time.

So how do you develop your money mission statement to help you decide what you are prepared to spend money on and what you are going to leave on the shelf? Tanja suggests some questions for you to consider. So here’s the questions and what my answers to them are:

My best ever investment
What is the single best thing you’ve ever spent money on?

I have struggled to choose one thing. At the moment I would say Natalie Bacon’s ‘Grow Youlife-coaching course which I joined earlier in the year. It has changed the way that I think about so many things in my life and given me the tools to really examine my thoughts and try to address the challenges that life puts in my path. Previously, I might have said my social work course, which enabled me to have a job that on the whole I really enjoy. The other things that came to mind were major holidays of which I have some great memories.

What ongoing expenditure makes you happiest?

My answer to this was again ‘Grow You’, but I would also include the online Pilates programme that I have discovered since the beginning of the lock down. Both of these are in the category of personal development. One for my body and one for my mind.

coffee magazine
I used to spend a fortune on magazines and didn’t always read them
What do you spend money on that you wouldn’t miss?

As I write, the answer to this question is honestly ‘nothing’, as I have really pared my budget down to the bone. Before I did that the answers would have been magazines, fiction books, facials, hairdressing and clothes. That’s probably why I have managed to go without these over the past 18 months and not miss them too much. On the other hand I have missed holidays, eating out with Mr Simple and friends and good food, which until the beginning of the pandemic were gradually creeping back into the budget.

What would feel like too big of a sacrifice to be worth it?

In my efforts to cut the budget to the bone I have reduced our grocery spending drastically, but I must admit this hasn’t always felt like a healthy way to live. I’ve realized that the food that is cheap is very carb-heavy, such as bread and pasta. I began to miss my avocados at breakfast. We don’t eat out as much as we used to do, but I have begun buying better quality products, such as extra virgin olive oil.

baguette baked baking bread
Even the simplest of meals out feels like a treat at the moment
Could you spend less on the things you value without missing out on the core of the experience?

I found this a hard one. We love meals out, but it’s something we only do rarely. When we do we like to splash out and go somewhere particularly nice. Doing it less often also makes it feel more of a treat. Since March the only food we’ve eaten out was a breakfast baguette and tea and cake, both at local country parks last month. Just those simple treats felt very indulgent.

We have had less expensive holidays over the past couple of years and they have still been enjoyable, but I don’t think that I would be happy if we could never repeat the experiences we had before Mr Simple got made redundant. For example, we did a cycling holiday in Tuscany with Skedaddle. A private car from the airport, bikes and directions provided and bags moved for you everyday whilst you cycled to the next hotel, enjoying the beautiful countryside and leisurely lunches. With holidays like that you’re paying to let someone else do all of the organisation and every so often I’m willing to part with my hard-earned cash for that service.

Was there a time in your life when you enjoyed your lifestyle, but spent less than you do now?

I enjoyed my twenties. After university I worked part time and volunteered a lot. I didn’t have any responsibilities. I didn’t have a mortgage, although I did live in some awful places at times, with neighbours who played loud music at 3am or where I didn’t feel completely safe walking the streets after dark. Holidays were volunteer projects where we worked five days out of seven, cooked for the group and camped. Travel to most of the destinations was by coach, often overnight. Not the most luxurious or a very comfortable way to travel. Would I want to go back to that time? No. I definitely wouldn’t want to rent a property again. I would though like to work part-time, as I did then.

Is there anything you enjoy, but are willing to give up to reach your goal?

As I said above, I have cut my budget the bone and given up lots of things. I see this as a temporary measure until we are financially stable enough to go back to splashing out a bit more on our food budget, eating out and holidays.

crop woman with coffee writing in notebook on bed
Use all of this information to create a spending philosophy
spending philosophy

Finally, combine all of this into a spending philosophy by filling in the following statements:

  • I spend mindfully and without guilt on: Pilates, Grow You, good food, food with friends and personal development books.
  • I spend only as much as necessary on: household bills and clothes
  • I do not spend money on: magazines, expensive holidays and frivolous items that I don’t need

In a nutshell, my philosophy is based on the value that I place on maintaining my physical and mental health.

So if you’re struggling to decide what to cut back and what to keep or maybe you’ve eliminated too much from your life and feel like you’re missing out how about having a go at this exercise and developing your own ‘money mission statement’?

Ideas For Meal Planning

introduction

As you will know if you’ve been here before I am a fan of meal planning. It’s something that I have discovered since I have been trying to reduce our monthly spending. Like anything it’s a case of trial and error and the last few months of lock down have made it more difficult. Fortunately now that things are easing up I’m back to getting a regular supermarket delivery. If you are trying to reduce your budget, food spending is one of the big three to focus on – housing and transport being the other two. It’s also probably the easiest area to work on without having to make drastic changes to your way of life. If it’s something that you’ve been thinking about for a while here’s a few tips and freebies to get you started.

Firstly check what you already have
Check your fridge and see what needs eating up
Begin with what you have

The first thing that I do is to open the fridge and take out the salad drawer. For me, this is where I store most of our vegetables. Make a list of what’s in there, particularly anything that’s been rattling around for a while and is on the verge of going off. Hopefully that won’t be the case very often in the future as planning your meals helps to reduce food waste. As well as veg what else do you have in the fridge that needs using up e.g. cheese, jars of sauce, half-empty tins, bowls of left overs.

After this, check your cupboards. I keep vegetables like potatoes and onions in there. You’ll obviously have non-perishables, such as tins of tomatoes, lentils and pasta. They don’t need eating up immediately, but I always think it’s a good idea to use up ends of packets or alternatively look at what’s been around for a while. It might also give you ideas for meals that you’ve not eaten in ages.

Finally, look at what’s in the freezer. I tend to put single portions of leftovers in the freezer. Although they’ll keep for a while, they won’t keep forever and so I try to eat them at least by a month after I’ve put them in there. Don’t know what’s in your freezer? Use a fridge magnet to put a list on the door or alternatively stick one on your kitchen noticeboard.

Think about what’s available at this time of year
What’s free or cheap

If like the Simple household you grow some of your own veg you need to add to your list what’s available to harvest. At the moment it’s peppers and tomatoes. Some things may keep in the ground for a while, whereas others, such as tomatoes and runner beans will need picking before they get too big or rot.

Even if you don’t grow your own it’s advisable to have a think about what’s in season. I feel that we’ve lost touch with this as many veg are available all year round. You’re more likely though to get a bargain on something that’s in season in the UK. I know that some people advocate looking at your supermarket flyer as it will tell you what’s on offer. To some degree I can see the sense in that, but usually many products on offer are highly processed ones that aren’t good for you and are more expensive than buying fresh ingredients.

There are lots of recipes freely available on the internet
Find recipes

Once you’ve got a list to draw upon you need to get some recipe ideas. I think that we can get into a rut with our meals and end up cooking the same things week in week out. Whilst we all have our favourites I believe that it’s good to have some variety. You may just discover a new favourite! We’ve got a selection of recipe books that I sit down with regularly. There’s always the internet as well, where you can find thousands of ideas. In more normal times I would regularly get recipe books out of the library. If there were enough recipes that we liked I might consider buying the book, otherwise I’d just photograph the best ones and then take it back to the library.

Ensure you shop with a list
make your shopping list

When you know what you’re going to be cooking over the next week or month you’ll have identified some ingredients that you need, so make sure that you put them on your shopping list. Having a list when you go to the store or do your online order is a certain way to save money and avoid future waste. It’ll stop you just shoving things in your trolley randomly and finding out when you get home that you can’t quite put together enough meals for the week or a crucial ingredient is missing.

Decide how long your plan will be
Structure of the plan

What period of time you plan for is up to you. Initially I was creating a monthly menu, but now we are having a supermarket delivery twice a month I’m planning from one delivery to the next.

There’s also the question of which meals you plan for. I started with just noting our evening meals, but more recently I’ve been planning breakfast, lunch, dinner and snacks. If you’re looking to lose weight or at least keep it under control, particularly when we are all at home so much and taking comfort in food, a clear plan of what you want to pass your lips makes feeling in control so much easier.

Review

As with any plan it makes sense to review it from time to time and make any changes you think would help. Once you’ve been doing it for a few months, if you keep your plans you can look back and make a list of your favourite recipes and where to find them. This can reduce the time you spend going through cookery books, although it’s always fun to have a few new meals each month.

Planning a ‘Work Optional’ Life

open book
It’s time to look at another book that I have been reading
introduction

After my posts on ‘Deep Work’ by Cal Newport, I thought that it was time to go back to a book about financial independence and early retirement. The book that I have chosen is ‘Work Optional’, by Tanja Hester. This is partly about how to financially achieve early retirement, but also a lot about shaping your life – a life that you love. There is much less focus on the author’s story than other books that I have read, which I found to be a refreshing change. Instead, it is a step-by-step guide on how to discover what makes you happy in life and work out how you can make that a reality. Tanja also gives two other options apart from total FI/RE, which are semi-retirement, where you work part-time, seasonally or in a lower stress job and a career break.

As regular readers will know, my goal is ‘partial early retirement‘ and so her suggestions fit nicely with my future life plan. Since reading the book, then re-reading it and taking some notes, I have been meaning to work through it to consider what Natalie Bacon would call my ‘future self‘. As a way of introducing you to Tanja Hester’s advice I thought that I would do this here, on ‘A Simple Life’. In that way I can share her ideas with you as well as have a think about how I can put them into practice in my life.

At the moment we all have more time at home and I think that this is a great opportunity to stop and reflect on our lives, something which I don’t think that we do often enough. We are usually on that hamster wheel, not really thinking about where we are going or even where we’d like to be going. We tread the same old path we’ve always followed and inevitably we’ll continue to get the same results, rather than mapping out a new path and starting intentionally on a road to a more fulfilling life.

house on a tropical beach
You may get bored of this after a while
define your work optional LIFE

I have heard many commentators and bloggers talk about finding a purpose in early retirement. Images of FI/RE often feature tropical beaches with the implication that you’ll be spending most of your time there when you retire. The idea of ‘escaping’ the drudgery of the 9-5 for a sandy beach may seem attractive at first, but eventually you’ll get bored and want something more fulfilling to do.

I certainly know from my own observations of my parents, who are traditionally retired, that my mother seems the happier individual of the two. She has joined many clubs and made new friends since she retired, as opposed to my father who spends much of his day watching television.

For Tanja the idea is that before focusing on the financial side, you need to work out the lifestyle part. Only then do you focus on the finances and calculate how much your ideal life is going to cost you. Once you’ve done that you will have a vision in your mind about what you’re working towards, as opposed to saving and earning just to escape your current situation.

areas to focus on

So how do you do this? Tanja suggests six different areas that you need to consider.

Four people laughing
Remember the times which made you smile
Day to day life

Think about when you are happiest. For me this is when I am outside, especially if the weather is good. It doesn’t matter if that’s in the garden, a walk along the beach or a hike in the mountains. I enjoy feeling the sun on my face and spotting the wildlife.

This area also asks you to consider your hobbies. It’s likely that you currently spend some of your free time doing things that your enjoy, but may get frustrated that work gets in the way. When your life isn’t so focused on earning money you could decide to make time for your hobbies or even take up some new ones. What would they be?

Big picture dreams

For me my dream has always been to live in France. It’s a country that I love and where I have spent many happy holidays over the years. I have been asking myself why I like France. The climate certainly plays a significant part. Being able to spend more time outside and have guaranteed sunshine is definitely a major plus point for me. That is something that cannot be guaranteed in the UK. I have been thinking of more modest ways of indulging my passion for France rather than upping sticks and leaving for the continent. So far my preference is for extended holidays in France.

Mr Simple always points out that by buying a house you limit yourself to just one area of what is a large and diverse country. For me I have always liked the idea of not having to pack to go away. Having a place where I can just turn up and everything I need is there – a whole wardrobe of clothes that I just wear in France. There’s no unpacking, no working out how to turn the cooker on or where the nearest boulangerie is because you know all that already. I can though see what he means. An alternative would be to rent a house for a month or six weeks, which if you don’t work is possible. If I am in a semi-retirement phase only two to three weeks would be doable. That would give me plenty of time to start to feel at home and get to know an area.

Whilst thinking about travel I also realised that in the winter the weather can affect my mood. We live near an airport and many retired people who live in our village take advantage of that by going away during the cold months to the Canary Islands or Cyprus. I’ve realised that I want to be one of them – to have time away, say in November and February every year in order to feel the sun on my face.

golden retriever dog
We love dogs and would have more time post-retirement to look after one
Legacy and Purpose

This is about your contribution to society. What do you want to be remembered for? Mr Simple and I have become boarders for ‘Guide Dogs for the Blind’, which means that dogs who are in training live with us for a few weeks or months. This works well if you have a job, as the dogs are taken out in the daytime to train. On a few occasions we have been asked to look after dogs who are having a break from training and this has not always been possible due to our work pattern. If we both worked less we may not have to say no in the future. There is also an option to have a puppy, which you do for a year, but I’m not sure how that would fit in with my plans for more travel. And I am sure that I would really struggle to say goodbye to the dog after he or she was part of our family for a whole year.

Self-Worth

Many of us define ourselves by our professions and once we retire this is no longer an option. Isn’t it always one of the first questions people always ask when you meet them, ‘What do you do?’, but which we know they mean, ‘What job do you do?’ I was listening to an episode of ‘The Life Coach School’ podcast about visualising your future self when the world is so uncertain due to Covid19. Brooke Castillo suggests focusing on your personal qualities such as creativity. Whatever the world throws at you these personality traits will remain. So what will make you feel good about yourself when work is no longer your main focus?

Tanja recommends thinking about what you feel best at in your work. Are there parts of your job that you could continue doing, saying in a voluntary capacity? Think transferrable skills. Think as well about what makes you feel good about yourself outside of work. My profession is social work, which involves interacting with people from all walks of life and trying to help them sort out their problems. If I didn’t work any more I am sure that I could do some volunteer work which embodies these basic principles.

Over the past few months I have developed an interest in life coaching. This has some overlap with social work, although the families that I meet through my job tend to be in quite dire situations. Those seeking life coaching usually have more middle-class backgrounds. The common factor is one of problem-solving i.e. helping people improve the quality of their lives. Without necessarily meaning to do so I have begun to use some of the principles that I have learnt from life coaching when working with families. I also find myself quoting Natalie Bacon when talking to friends or Mr Simple. How it all translates into occupying myself during semi-retirement I’m not yet sure, but it’s an area that I plan to continue to develop.

a man and a woman
Who are the important people in your life?
Central Relationships

Do you have a significant other who will be sharing your ‘Work Optional’ life with you? For me that is Mr Simple, and although I talk about working part-time and planning how that will look, he is not interested in doing this with me. He believes that action is the key, whereas I like to spend more time thinking about things before I get on to the doing part.

As well as your partner, think about other people in your life who you would like to spend more time with. Once work is not such a big part of your life you should be able to make more space for them. If they live far away maybe finally you’ll have the time to go and stay with them. I’ve mentioned this a few times before, but friendships is an area where I struggle to find like-minded individuals. I know people, but the honest truth is that many of them are acquaintances rather than friends. If any of you have suggestions about how I can work on this area I would love to hear them.

Finally within this area there is your community. I live in a lovely village and have daily contact with my neighbours. Even during this period of lockdown due to the coronavirus there are frequent Whataspp messages exchanged between our group of neighbours and everyone is supportive of each other. We don’t plan to move from here and so this will continue and maybe even become a greater part of my life when I have more time to get involved in the activities that they arrange.

Life Logistics

Think about where you want to wake up every day. For me I am happy for it to be in our current home despite wishing the sun shone here a little bit more. Our current goal is to finish renovating the house so that we can spend more time enjoying it. Do you plan to stay where you are or are you planning to travel the world once you are retired?

path through a rape field
I love being outside when the sun is shining
Conclusion

So where are we? What is my semi-retirement life going to look like? After considering each of the six areas Tanja suggests that you consider the themes that emerge across the different categories of your life. For me I think that this is the outdoors, sunshine and animals.

So now hopefully you have an idea of what is important to you and the outline of a life vision that you can work towards. You may even want to write this out or create a vision board which you can stick up or have as your screensaver. Somewhere that you will look at it every day.

Next time we’ll look at creating your money mission statement, but that’s it for now. Until next time, take care, Sam.

Ideas to Save Time and Money at Christmas

Stuffed toy reindeer sitting on a sofa

Christmas is fast approaching – that time of year when it is expected that you spend money you haven’t got to buy gifts that other people don’t need or want. I can hear the booing and calls of ‘Baa Humbug!’, but I honestly believe that this is true. I am not a religious person, but I feel that we have moved a long way from the real meaning of this time of year. There is so much pressure on us to go mad, spend lots of money and eat until we pop. But I truly believe that Christmas is optional or at least all of this excess is.

If I ruled the world I would make Christmas like the Olympics – just once every four years. I am not against the time that we are given off over the festive period, as this enables families to spend time together, but often the weather isn’t good and we all just eat too much and then slump in front of the TV for hours. I would rather have the time off when the weather is better, but as I don’t make the rules here are some ideas for moderating the excess that is shortly to come…

Just buy for the children

This is what we have done in my family for years. Once we all got jobs my mum suggested that we stopped giving presents to each other as we could all buy something for ourselves whenever we wanted to do so. I first met Mr Simple, fifteen years ago and he and his parents were still buying presents for each other. When his mother learnt that we no longer did that in my family she agreed that it was a good idea and so now they are ‘present-less’ at Christmas as well.

Keep the cost of each present to under £5 or £10

If you can’t survive the festive season without having several beautifully wrapped packages to open then keep the budget low by limiting spending on each present. There are Secret Santa schemes for several groups that I belong to and there is always a limit to cost of the gift.

Pick one adult, like Secret Santa, and buy for them

My physiotherapist mentioned this to me recently. He is part of a large sibling group, so instead of everyone buying for everyone else, they just buy a present for one of their brothers or sisters and obviously only receive one present. In this way it could be that although you get one present, it may be of more value and therefore something nicer than the several pairs of socks or smellies.

Give the money you would have spent to a charity

If you decide not to do presents, but still want to give something to someone, then give some money to your chosen charity. Find something close to your heart or maybe linked to Christmas, such as one that provides food or shelter to homeless people during this time.

Invest the money

As you won’t be spending as much money as you usually do, put the savings into a high interest savings account or even better, your ISA, in true financial independence style.

Prepare for Christmas 2020

Once the madness is over go shopping and buy cards, wrapping paper, etc. for next year as it will all be on sale at discount prices.

Share the cooking

Instead of one person taking all the responsibility for cooking, share it around and get someone to bring the starter, someone else the dessert, others mince pies, cakes, etc. Just let the host cook the main course, which will be the hardest meal to transport. There may be people who aren’t so good at cooking, but give them something simple to make, or maybe they can just bring the treats such as chocolates, crisps, nuts, etc.

So there we are, a few ways to save time and money at Christmas and hopefully make it all a bit less stressful and a bit less expensive. Whatever you’re planning to do over the festive season I hope have a lovely break.

Why You Really Need a Budget

calculator
If you want to stop being poor you really need to start budgeting

I get fed up of reading blog posts where people say they don’t budget or they don’t need a budget. It makes me mad! You may be one of those people that finds the thought of having a budget rather boring, but it’s essential. If anyone tells you that you don’t need a budget they are lying. Not having a budget means that your bills don’t get paid on time. It also means you may have to get into debt just to be able to pay for the basics in life.

In the world of Financial Independence/Retire Early there is a focus on making it sound fun and exciting. In reality, it can be hard work. Stephen Covey said that effective people are prepared to do things that other, less effective people, aren’t. Believe me, if you want to be effective in the field of early retirement and financial independence you’ve got to put in the work. This means having a budget. To some of you will seem like common sense, but I am always amazed at how many people don’t actually have a grip on their money.

So what does a budget look like?  

How to set up a basic budget

If you want to have any chance of getting control of your finances then you need to start looking at what you are spending your money on. If you don’t know how much is in your account and you are blindly handing over your credit/debit card to buy something that you don’t really need then you are in trouble.

You could start by keeping track of your expenses over the next few months, but really you need to look at a whole year. I’d recommend pulling out your old bank statements and having a look at where your money went.

Light bulb laying on grass
If you want to keep the lights on you need to start budgeting

Predictable Expenses – monthly

Let’s start with the easy part. Look at the regular bills that you are paying each month. For me these are gas, electricity, mortgage, council tax, water, phone and broadband and TV licence. I recommend setting up a separate account to pay these out of. You can automatically transfer a set amount to that account the day after payday. With that done you won’t be at risk of having the gas cut off.

Predictable Expenses – annually

Secondly, there are some bills that you only pay once a year. For me these are:

  • Car service
  • Car tax
  • MOT
  • Vehicle recovery
  • Car insurance
  • House insurance
  • Travel insurance

I also add money for medical expenses such as opticians, dentist, my physio appointments. Finally I add money towards my holiday fund. For some of the annual bills there is the option to pay them monthly by direct debit, but often this increases the annual total.

Make a list of all your one-off annual expenses, plus anything else that you want to save towards each month. Add up how much you spend on these in a year and then divide by 12. If you are going to have a second account for your monthly expenses you can then add this amount to your post-payday transfer every month. That way, when the yearly bill comes around you’ve already got the money saved. It also prevents those expensive months, as you spread the cost over the year.

Savings

If you haven’t yet got a grip on your spending, then finding some money to put away each month may not be at the top of your list. I would hope that as you’ve gone through all of your main expenses you will have discovered where you could make some savings. Hopefully you’ll have been amazed at how much you’ve wasted on things that in retrospect you could have done without. Once you’ve worked out how much you can afford to save it’s just a matter of transferring that amount to a savings account or preferably an ISA each month.

woman doing pilates
A Pilates class – one of my weekly expenses

The remainder

What you have left is yours to spend as you see fit. I have six categories for this money. They are food, petrol, toiletries, Pilates, social and miscellaneous. As I am someone who likes budgeting I allocate a certain amount to each category, but it’s entirely up to you how you spend this. As long as you don’t go overdrawn by the end of the month then you’re doing okay.

So there we are, a simple guide to start to get a grip of your expenses. It may seem like a lot of work to start with, but once it’s in place you won’t have to worry anymore when you get to the end of the month as to whether you’ve got enough money to pay the bills.

Do you have particular problems with your budget that you are trying to tackle? Let me know in the comments section or if you’d rather keep it private send me an email via the contact form and I’ll see if I can help you.