We live in a stressful world where so many of us are on the edge of burn out. Where do we find peace in all of it. How do we even find true financial peace these days.
People are working up to 3 jobs and are still barely able to make ends meet. Families worry about every major expense, pinching pennies and using credit cards to make sure they always have enough.
But would it be possible to have a boring financial life with no stress? What if your money remained boring and safe when – not if – the next recession hits? Well, that’s what we’re going to be looking at in today’s episode.
We’re going to be taking a look at the roadmap to achieving true peace when it comes to your financial independence.
Here Are The Show Highlights:
– The most boring budgeting app that you should be using ([3:35])
– Why being financially independent doesn’t always equal peace ([10:00])
– Two critical objections you need to pay attention to on your path to financial independence ([12:50])
– Grandma’s helpful money metaphor that could mean a wealth of common sense ([17:25])
– Three sure-fire ways to reduce stress and help you move towards true freedom ([19:15])
– How to invest…if you can’t afford to lose ([21:35])
Remember to download Grandma’s free wholesome wealth recipes book by dropping into http://www.grandmaswealth.com. Time-honored wealth strategies served with a helping of balance and trust.
If you’d like to see how Grandma’s timeless wealth strategies can work in your life, schedule your free 15-minute coffee chat with us by visiting Grandmas wealth Wisdom!
A hearty welcome to Grandma’s Wealth Wisdom with your hospitable hosts, Brandon and Amanda Neely. This is the only podcast for strategies to grow your wealth simply and sustainably like grandma used to. Without further ado here are your hosts.
Amanda: Hi, I'm Amanda and welcome to Grandma's Wealth Wisdom where we work with you it to build wealth grandma would be proud of.
Brandon: And I'm Brandon and today's episode is titled "On the Verge of Peace". So in our household peace is a challenging thing because we have our 10 month old baby, we are both entrepreneurs running a business in the new years of it, we have our mother-in-law that is with us and she takes care of the baby but then there's other drama and the baby crying throughout the day, so peace is very elusive sometimes. [0:01:07.8]
Amanda: Right, we get like five hours of peace when he sleeps at night before he wakes up again at like the most sometimes it's just three or four hours of peace, but we're typically sleeping at that time too. I'd say it's not really the 10 month old and the crying or the waking up that causes the disruption of peace in our household, I'd say it's some other adult male that instigates argument and teases people and especially his mother in law, my mom, and needs to learn how to pick on someone his own size.
Brandon: I don't know, okay, whatever. So maybe I do cause a little bit of non-peace sometimes in the house, but overall it's not me
definitely, it's other people. Anyway, speaking about that as we were writing this episode "On the Verge of Peace" and realizing that we live in a stressful world where so many of us are on the edge of burnout. [0:02:10.5] Now in our household we're not on the edge of burnout.
Amanda: Right, the lack of peace in the world is a lot more than just cute babies that don't sleep for very long or grown men that like to instigate a little spits and spats.
Brandon: Or mother-in-laws or wives, whatever.
Amanda: Who also tease back, yeah, that's true.
Brandon: Whoever those people are, I'm not going to name any names, Amanda.
Amanda: No, not me.
Brandon: But there are those people out there. Again, we live in that stressful world where so many of us are on the edge of burnout. People are working to three jobs and still barely able to make ends meet. Families worry about every major expense and pinch pennies or actually use credit cards to try and make sure they'll always have enough. [0:03:02.6] Could it be possible to have a boring financial life with no stress? I mean really, what if your money remain boring even when, not if, but when the next recession hits? That's what we're going to be looking at today in this episode.
Amanda: Where we're going to start today is not where you might expect us to start on this "On the Verge of Peace" episode, but stick with us, we are going to be building up to where we're going to today, so here's where we want to start with. We don't keep it a secret, but Brandon and I, we are big fans of a budgeting app called You Need a Budget or WNAB for short, WNAB.
Brandon: You use it a lot more than me; I like to just look at what you've created really.
Amanda: We have budget meetings on a monthly basis and talk things through and it's really helped us to have that as an independent place where then we can come in and look at our spending and set things accordingly. [0:04:06.0] One thing that's really cool about the people that have built WNAB and how they talk about budgeting in general, the slogan, "You've never budgeted like this before.", they actually talk a lot about making budgeting boring, and they have Reddit, or a sub-Reddit that's for the WNAB community and I have to read you this post from about three years ago. This was posted by Essence of Oat, and Essence of Oat titled this WNAB Got Really Boring, and here's what Essence of Oat wrote. "This might sound weird, but I used to use WNAB as a way to waste time and procrastinate. There was always lots of bank transactions to enter, a tricky budget to juggle and the mystery of where all that money was going. It was a good way to convince myself I was being productive when I didn't want to do anything else. Lately I've been having a real problem though. I find myself with nothing much to enter, my budget is buffered and planned out for the month, there are no debts to puzzle over, how am I supposed to waste time now? [0:05:06.5] Maybe they could add a snake game in somewhere or something."
Brandon: I've been looking for that snake game added to the WNAB and I still haven't seen it, so apparently they didn't read her post. No, they probably did. There are actually 78 comments on this post and they are really hilarious if you're a WNAB user. If you're not though, Amanda and I would love to explain to you what's going on with this WNAB thing.
Amanda: Yeah, so WNAB users follow four simple rules to get to this point where their money is utterly boring. Essentially WNAB can help users break the paycheck to paycheck cycle, and be in what some call a "buffer land". In the mystical, not so mystical, in the beautiful buffer land, the user, the budgeter, the people like you and me, when we're in buffer land we have money set aside in various categories like car repairs and holiday spending. [0:06:06.0] And then we are buffered in case of an emergency like a tire blow out or the large annual expenses that come every year in December. When you've got money set aside...
Brandon: What is that in December that comes?
Amanda: The holiday spending.
Brandon: Yeah, yeah.
Amanda: The holidays, yeah. So when you've got money set aside your financial life can get pretty boring, but if you take that motivation that got you to buffer land, so from where you are now the motivation that takes you on this journey over land and sea, gets you to the beautiful land of buffer land and where things could get boring, instead you could take the motivation that got you there and use it toward the next stage of the journey where something else magical could happen.
Brandon: Amanda, what is that next magical stage after reaching this mystical land of buffer land? [0:07:01.3]
Amanda: Yes, so once you reach the magical, it's not mystical, it's real, not magical. Once you're in the magical land of buffer land you could start working toward financial independence, another beautiful land that would be really awesome to get to. Because if you're in buffer land, you've broken the paycheck to paycheck cycle, you could continue the journey from there, keep that motivation going and apply it toward bigger and bigger dreams. When you reside in buffer land, then you can start dreaming or you can reawaken dreams of experiences that you'd like to have, or say, leaving your current job to pursue your real passion or whatever dreams that you might have.
Brandon: I would add here, you could pursue these dreams prior to being in buffer land, but then you'd still be susceptible to chaos and stress when the unexpected comes up. Or as Amanda mentioned, December arrives, like it does every year. [0:08:06.6]
Amanda: Can you imagine a year without a December? It'd be a pretty sad year.
Brandon: People would save a lot of money.
Amanda: Yeah, but all that joy and fun and holiday parties that happen in December wouldn't exist, and that would just take all the fun out of life.
Brandon: I mean I am excited this next year our son will be about a year and a half and I think it will be a lot of fun to see actually him opening presents and not just playing with wrapping paper. That's going to be fun for us.
Amanda: Yeah, and we can still enjoy that, people still enjoy December even if they're not in buffer land, but when you're in buffer land, December just becomes even more fun. And then there's also the other end of the spectrum where some people don't believe they can dream until they've reached that buffer land. They feel so overwhelmed with financial responsibility and chaos that there's no hope at all.
Brandon: We've had people tell us just that. [0:09:01.2] I mean a client literally told me, "I cannot dream, I haven't been able to dream for years." That was kind of sad to me.
Amanda: Right. So that's actually what we're going to be talking about in our next episode, we're going to be talking about finding hope in the midst of despair. Now let's go back to this whole topic of financial independence now.
Brandon: Yeah, so we've done a series of three episodes about financial independence, and in those episodes we define financial independence, we talk about the threats to it and how to avoid those threats, we've all been told those three episodes are the best we've created so far. If you want to listen to those go to GrandmasWealthWisdom.com/fire to hear those awesome episodes. Now let me ask Amanda this question. So Amanda, how does financial independence fit into this conversation about peace?
Amanda: Right. So this is where I'm now bringing it full circle. [0:10:01.7] So if you look at one definition of peace, a very personal definition of peace, it's this, "Freedom from disturbance or tranquility." The word "freedom" though as right there in definition, "freedom from disturbance", "freedom" and "independence" are synonymous, they are actually synonyms if you like them up. Within freedom's definition is this idea of the power or right to act, speak or think as one wants without hindrance or restraint, which leads me to believe that freedom or independence is required in order to have true peace. Very philosophical there.
Brandon: What does that mean practically, though?
Amanda: Right. So this means that peace is more than just getting out of debt. It means that peace is more than just an absence of stress or a sense of boredom with your budget. Peace includes the freedom to dream and actively pursue those dreams. [0:11:00.4] Peace means you have the power to act without hindrance or restraint. That's pretty powerful.
Brandon: Yeah, it is. So what you're saying is that peace includes the freedom to dream and actively pursue those dreams, not just getting out of something like debt. That seems like a pretty worthy goal to reach with our finances if you ask me.
Amanda: Yeah, and I was talking to a couple recently that share their biggest frustration with money is not being able to make quick decisions. They have to be thoughtful and careful, and for them the reason they have to be thoughtful and careful is because they don't have that freedom, they are severely constrained with their finances, they don't have peace when it comes to making decisions around what to do with their money. Well I think that even when you reach peace you should still be thoughtful and careful with your money, you don't want to waste or squander, you still want to be a good steward. What this couple was talking about is the stress that comes with each decision they make, rather than carefully and thoughtfully planning to reach for those dreams, and that's quite a difference between being thoughtful and careful because you want to you and being thoughtful and careful because you have to. [0:12:16.3]
Brandon: So it seems like we're setting up a roadmap here for being on the verge of peace. Step one, break the paycheck to paycheck cycle and reach this land of buffer land, not mystical but magical land of buffer land, and steps two, start working towards financial independence where you can go after your dreams and passions and not just the debt free thing but actually going after dreams and passions.
Amanda: Yeah, so there's two important things, maybe objections that I would bring up here to make sure we're talking about the right thing here. So first of all, these two steps are definitely easier said than done, to break the paycheck to paycheck cycle and reach buffer land and then to start working toward financial independence, they take a lot of time and effort to make happen. [0:13:09.8] There's a need for the motivation to put forth that effort to make it happen, and that motivation to be really hard to dig up, which is actually part of the second objection is that we don't really want to talk about this as step one and step two because our journeys with money are not linear like that. We don't typically have the motivation to reach buffer land unless we can celebrate some dreams happening or the potential of those dreams happening along the way. We can lose that motivation if we're just only cutting back and being super disciplined on our way to breaking the paycheck to paycheck cycle and reaching buffer land. That's why I think it's important to not keep things so linear, that you still could be thinking about financial independence even while you're thinking, even before you've reached buffer land. [0:14:10.5] So for example, Brandon and I, we created a strategy for financial independence before we had a budget, before we had ever even heard of "you need a budget", and way before we lived in buffer land we had that strategy together first.
Brandon: We created that strategy for independence and it actually helped us get more serious about budgeting and reaching that buffer land, which is true, but we also, I think a lot of times people don't want to like think about those numbers, it's too overwhelming or too frustrating and so they don't even entertain that idea. So we were kind of wrestling with those numbers trying to figure out, again, how do we get to this peace place.
Amanda: Yeah, I just thought of this, not in the notes, I'm going to go off script here for a second, but I think if we were going on a journey across a set of mountains and peace might be on a far mountain that's further away and buffer lands might be on a mountain that's a little bit closer and we want to get to peace, but we have to go through buffer land first and then we get to peace. [0:15:20.3] But if we don't have that vision for the financial independence, the peace, and we don't have that as our final destination, then what's the point of getting the buffer land? Right? Sure, that might be a little helpful, but it's not as helpful as seeing that ultimate vision first. As we're thinking about do you need to get to buffer land before you can chart the destination of financial independence, I'd say no. Chart the full destination and then you'll see buffer land along the way as you go. The other thing, so using that analogy, it's not a perfect analogy in terms of the one set of mountain ranges and then the other set behind them and going from one to the other, because life happens and life is complicated and it's totally possible to go in and out of buffer land, to make some progress on your journey toward financial independence and have a setback. [0:16:16.6] Things happen, like we lose income entirely or we have our income decreased substantially and we have to be able to figure out what to do that.
Brandon: That goes back to our previous episode "On the Verge of Ability" where having a disability or something happening in your life, it's possible something could happen, and so being able to move towards buffer land and being able to know that when life happens to go in and out of buffer land as you maybe lose income or your income decreases substantially, we're able to withstand that, and that's where WNAB's rule number three is roll with the punches to maintain flexibility so that there's not stress because of being too strict. [0:17:06.4]
Amanda: I'm full of analogies today. The analogy I would use here, so if the first one was the set of mountain ranges we're going to go through, get to the top of mountain, buffer land, and then we're going to go to the mount of financial independence and peace after that. If it's not as linear, what I was thinking is it's more like, do you remember grandma's landline with the base of the phone and then the handle of the phone and the cord between the base and the handle was this curly cord?
Brandon: The long cord from the base of the phone that could run everywhere and then you had the curly phone cord that was pretty long sometimes, so then you could go in the other room.
Amanda: Yeah. So this analogy is helpful because then when you're going in and out a buffer land you have to roll with the punches, you have to be flexible, you have to expand and contract just like that telephone cord. [0:18:03.2] You don't want to be like a stick, where if the stick experiences some stress it experiences periods that put it under pressure, what happens?
Brandon: It'll break.
Amanda: Exactly. Whereas the telephone cord can expand and contract, it can get you across the room so you can grab a piece of paper and a pen to write something down to take a message for grandma or whatever it is. I don't know how many people listening are actually going to remember that, but that's an analogy I find helpful here.
Brandon: It is Grandmas Wealth Wisdom; we should use grandma type analogies I think.
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Brandon: So what's the bottom line about peace and having a boring, stress-free financial life? I mean Amanda, what's the bottom line to all of this?
Amanda: Yeah, I kind of meandered here and there with analogies and different things, but let's just say this, regardless of where you are there are I think three sure fire ways to reduce stress and move toward freedom. There could be more, not all these are going to apply to everybody, but I think these are my three top ones. The first one is to take the next step. Don't get overwhelmed with all the things you could or feel you should be doing, figure out one step and make that step. Once that step is solid then you could think about the next step. Some examples of next steps, maybe you add $1 a week to a buffer account, or maybe $10, or whatever it is. [0:20:04.7] Maybe that's what you do. Maybe you set up a Dream Fund and you start moving money there on a regular basis. I know that's been helpful for Brandon. When he feels like I'm being super strict on the budget he can remember anything we save is going to go to the bigger dream and that helps him feel better about what could be perceived as me being strict. So maybe set up a dream fund. Maybe revisit your goals and decide if they're still the same. That could be a great next step. Maybe your goals need to change as life has changed; maybe they need to be like that telephone cord that expands.
Brandon: This reminds of, what about baby steps? Baby steps.
Amanda: Yeah, take the next step. Second thing that you could try to reduce stress and move toward freedom is to keep your money out of prison. What do I mean by that? Your buffer money, your dream money needs to be accessible without penalty, including taxes. This means when you're putting money into a tax qualified plan like a 401K or an IRA, you are not creating buffer or dream money, unless of course those dreams are after 59.5 years old, but then you still probably have to pay taxes on them unless they're in a Roth IRA or something like that. [0:21:14.2] So keep your money out of prison. If it sounds like it's going to be inaccessible or only accessible with penalties, then it's probably in prison, maybe look for somewhere else to store your money.
Brandon: Makes sense.
Amanda: And then third way to reduce stress and move toward a financial freedom is to get out of the stock market and other volatile financial products. We have a rule of thumb that we learned from grandma, don't put money at risk that you cannot afford to lose. If you have money that you need it for the future, whether short or long term, make sure it's somewhere safe with predictable growth. Use safe, predictable strategies that can bring you a whole lot of peace knowing that money is going to be there when you need it. [0:22:00.0]
Brandon: I just talked to a client the other day that was hoping to put some money into something that was, in the stock market, he wasn't risking his retirement, he was like, "I want to try this." and actually he does the sure thing and it actually lost money. He's like, "I do that more for fun as opposed to for my future." I really liked that when he told me, "I have other things that are my stability and dreams."
Amanda: Yeah. We're not saying don't put any money in the stock market or other volatile products, we're just saying don't put money that you can't afford to lose.
Brandon: Yeah, exactly. So knowing what you're going to end up with is huge, especially when it comes to retirement we kind of would like to know what are we going to end up with making sure we have that. Imagine with us for a second the next recession just hit and your friends are seeing their retirement funds cut in half, everyone's homes are worth less than they were three years ago, people are starting to lose their jobs due to your company layoffs and so forth, yet you live in buffer land and have enough saved up to weather the storm. [0:23:06.3] Plus, your buffer and dreams money is set aside in a safe place where it wasn't cut in half in the first place. In fact, your money still continues to grow. While people you love are stressed you're continuing as if nothing happened. This is true peace in my opinion. This is a boring, stress-free financial life. Now the question is what are you doing to move in that direction before the next bubble bursts, because it'll probably happen at some point.
Amanda: Yeah, it's a matter of when not if, and this is actually where Brandon and I specialize, what we love to think about is helping people strategize ways to make their financial life boring and stress free. If that's something that you would like for yourself we would love to connect. You can visit GrandmasWealthWisdom.com and at the top there you'll see "request a meeting" where you can schedule a 15 or 20 minute call to see if and how we might be able to work alongside you to move your money story, move your finances toward buffer land and financial independence, and what some of those next steps could be for you. [0:24:22.8] We would love to just explore that with you. Go to GrandmasWealthWisdom.com and click "request a meeting".
Brandon: Awesome. Thanks, Amanda, for enlightening us here. So in the next episode we're going to be continuing our "On the Verge of" series with "On the Verge of Hope". We hear from so many who only feel despair when it comes to their money, no matter where you find yourself, unemployed, too busy to change, caring for a relative, there are always ways to find hope, so be sure to subscribe so you don't miss that uplifting episode. [0:24:59.7]
Amanda: And if you're like some of our clients and can't imagine a dreaming right now, this episode, this next one is going to be a special for you.
Brandon: So until next time, keep building your wealth simply and sustainably for your own future and the future of our grandchildren's generation.
The topics presented in this podcast are for general information only and not for the purposes of providing legal, accounting or investment advice. On such matters place consult a professional who knows your specific situation.