1. Mint.com
	A long-time leader in personal finance management, Mint.com provides efficient and user-friendly budgeting tools. This mobile version, which securely connects to your bank accounts to track and categorize expenditures, optimizes the budgeting program. The mobile software allows you to manually enter pending and cash transactions on-the-go, meaning that your accounts are always up-to-date. Mint’s app will let you quickly check how much you have remaining in, say, your food budget, so you can smartly decide to grab a can of beans or splurge on a nice cut of meat while standing in the grocery-store aisle. Free from iTunes but you’ll need a free Mint.com account first.
2. Balance
	While automatically updating apps are nice, manually entering your purchases can make you feel more accountable for what you spend. Balance is a basic app to help you manage the balances on all of your accounts. Whenever you make a purchase, pay a bill, or deposit a check, you simply enter the transaction into the app. It then recalculates your new balances. The app also supports recurring transactions—like that monthly gym membership—and enters them automatically. Just the exercise of writing down all of your purchases might make you spend less. With this app, you’ll really learn how quickly those three-dollar lattes add up. Plus, you’ll avoid overdraft fees by always knowing how much is in your accounts. Free from iTunes.
3. BillTracker
	With this handy app, you’ll never pay a bill late again. BillTracker tracks due dates, amounts owed, and confirmation numbers for payments. You can set up reminders so that your phone will alert you when a payment is due soon or overdue. It also lets you set up recurring bills and view bill history to confirm when you sent a payment. Use the app for all of your payments, from water and electric fees to cell phone bills and insurance expenses. The company also makes a free, lite version, but it does not handle recurring bills. $1.99 from iTunes.
4. Debt Minder
	If you’re struggling to pay credit card debt and student loans, Debt Minder will help put you on the debt-free track. The app tracks debts for big purchases—like cars, houses, credit cards, and student loans—and monitors how you pay them off. It even creates personalized plans, including highest interest and smallest balance, to help you pay off debts when and how you want. With color-coded graphics and charts, the app lets you visualize where your money is going and how you are handling your overall debts. $0.99 from iTunes.
5. freecreditscore.com
	Your credit score can make the difference in many of life’s biggest moments, from buying a house to getting a new job. This app tracks your score in real-time so that you can be in charge of your financial future. To use the app, you must be a member of freecreditscore.com—which costs $14.95/month—but the immediate updates and alerts provided by the app may pay for themselves in terms of your peace of mind. The app provides detailed information about what’s hurting and helping your score. If you pay a credit card bill late, for instance, the app will track how your credit score responds. It also includes a Score Estimator to help to make smart financial choices. Free from iTunes.
6. Mortgage Calculator Free
	iTunes contains a handful of mortgage calculators, but this one is the most popular because of its ease of use and simplicity. The app provides multiple mortgage options to figure out whether you can afford to buy your dream house. You can also use the app to configure monthly and yearly fees, including private mortgage insurance and home insurance. It will calculate property taxes using a variety of settings, including how frequently taxes are paid. Whether you’re in the market for a new house or just interested in learning whether you could afford that condo down the street, this is the app for you. Free from iTunes.
7. Expensify
	While compiling expense reports is typically an annoying and unorganized process, this versatile app makes it a breeze. Expensify syncs with your various credit cards and bank accounts to track business-related purchases. It also collects digital receipts from merchants and lets you send copies of paper receipts using your phone’s camera. Simplifying organization, the app sorts expenses by customized categories like meals, mileage, and company. When you’re ready to send in an expense report, Expensify will compile all necessary purchases and email a PDF to the appropriate contact. You can even be directly reimbursed to an online checking account. Free from iTunes.
8. Gas Cubby
	If you own an automobile, car maintenance and gas expenses are probably taking their toll on your wallet. Download this app to save money and keep your car in tip-top shape. The app uses your phone’s GPS to chart car mileage and how much gas you’re using. It also tracks gas prices at different locations so that you can get the best local deals. In addition to recording gas usage and mileage, the tool has customizable service updates. Use it to get reminders about when to change your car’s oil and other maintenance needs. By keeping up with basic automobile upkeep, you’ll save money on larger expenses and your car will run for years to come. Free from iTunes.
9. iTrade
	If you want to learn more about the stock market without putting your finances at risk, look no further than iTrade. The app lets you manage a virtual stock portfolio, compete with information from other members, and research stocks with news and history graphs. Although just a game—at the end of the month, the app calculates top players—iTrade looks and feels like a real trading platform. It only operates during actual trading hours and even includes virtual broker fees. Practicing on the app will prepare you for the real stock market while eliminating risks—even the app is free. Free from iTunes.
10. Real-Time Stocks
	If you already have investments in the stock market or are looking to join in, check out Real-Time Stocks. While there are many stock-tracking apps for the iPhone, Real-Time Stocks is probably the most basic and easiest to use. The app displays real-time quotes and charts for most U.S. stocks. It even lets you monitor multiple stocks at once. Using the app, you can create a watch list for stocks most important to you and track global indices. It also allows you to manually enter stocks in non-U.S. exchanges. Even if you don’t have a stock portfolio, the app is an excellent way to track the market and learn more about its ups and downs. Free from iTunes.
11. Wikinvest Portfolio
	Wikinvest Portfolio Image: Wikinvest.jpg If you have one or several stock portfolios, Wikinvest Portfolio, which monitors all of your investment accounts in one place, is the app for you. The secure interface automatically imports your holdings from over 60 common brokerages, including Merrill Lynch, Fidelity, Etrade, Moran Stanley Smith Barney, Schwab, and more. The app lets you compare your portfolios’ performance to major indices and view real-time quotes and news for all of your investments. You can also research future investments with the app by viewing company charts, community analysis, and news. Free from iTunes.
12. iSlick
	iTunes contains tons of apps for sales, freebies, and group-based coupons, but iSlick combines all of these categories into one smooth interface. The app lets you track sales from shopping and deal websites, like Amazon.com and Groupon, to get the best prices on everything from electronics and household products to spa services. It also lets you choose from specific deal-types—such as freebies—and enter keywords. On the hunt for a new laptop? Use the app for up-to-date deals on the best machines. Free from iTunes.
13. Ask Dave Ramsey
	With this app, Dave Ramsey’s popular financial radio show is at your fingertips anytime, anywhere. The app has a database of hundreds of popular calls made to the show with real-life money questions and answers. You can read a short summary of the question or listen to the actual radio clip. Financial concerns are sorted into categories, like taxes, insurance, and budgeting. You can also choose to listen to a random clip to deepen your knowledge about all things money. Want to learn more about how to save when unemployed or how much you should budget for pet emergencies? Grab this app for answers to these and many more money predicaments. Free from iTunes.
14. PayPal
	PayPal’s app is one of the most popular financial apps available for the iPhone, and for good reason. The app lets you send money to people as gifts, collect funds for a group gift, and receive payments. You can also use it to create and manage fundraising campaigns. The app’s “split bill” feature is particularly convenient when dining out with friends—it even has a tip calculator. Download this straightforward app to save time writing checks and trekking to the ATM. Free from iTunes.
15. Your Financial Institution’s App
	Mobile banking makes it easy to check balances, transfer funds, and pay bills from anywhere. Almost all major banks now offer banking apps that make managing your money simple and convenient. Some of these apps, like the one from Chase, even let you take deposit funds by taking pictures of checks with your iPhone’s camera. You can also use your bank’s ATM-finding tool to locate the nearest cash machine, saving you extra dollars in fees. Here are a few of the major banks with apps in the iTunes store: Bank of America, Capital One, Chase, Citibank, ING, SunTrust, Wells Fargo.

Rebecca Kutzer-Rice is a freelance technology writer living in Brooklyn.

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We buy insurance. We work for a paycheck. We put our money in an FDIC-insured savings account even though it pays less than 1.0% interest.

These things aren’t necessarily bad; a little bit of caution is a good thing.

But when you become conditioned to reject nearly any risk in your life, think of how this influences your behaviors and, more critically, how it impacts your life.

• you don’t talk to that beautiful guy/girl at a party because you’re afraid of rejection; you stay single
• you don’t take credit for an outstanding job at work because you’re afraid others will think you’re bragging; somebody else gets promoted
• you don’t follow your passion because you’re afraid others will call you crazy; you have major regrets in 30-40 years

Risk is good.

Risk creates progress.

(In this video, Peter Diamandis explains why he’s comfortable asking people to risk their lives in pursuit of the X PRIZE, which he created.)

But you don’t have to risk your life to rocket into space. You don’t have to quit your job to become an entrepreneur (unless you want to, in which case, you probably should). But this year, after your resolutions to hit the gym and stop buying lattes have failed (and most of them will), resolve to take a risk or two.

Talk to a pretty stranger. Go skydiving. Start freelancing. Leave a job.

There is a line, of course. I’m not telling you to stake your life’s savings on red at the roulette wheel. There are big risks and small risks. Some risks have positive expectations, like the strong likelihood a boss will grant a hardworking employee’s request for a modest raise. Some risks have negative expectations—roulette, for instance.

Of course, not all risks will pay off.

But success is earned on the back of many such small risks, and the obdurate takers will be rewarded with far more than the costs of their failures.

I know this isn’t specific financial advice you might be expecting, but it is—most importantly—actionable. You can resolve to take risks this year. And you can start today.

MY LATEST RISK

I’m taking risks all the time. And recently, I took a big one:

Last month, I left my day job to work full-time on Money Under 30.

Now, if you’ve been around awhile, you’ll know that for a few months in 2009, Money Under 30 was my primary focus while I juggled some other part-time projects after moving from Boston to Portland, Maine to be with my wife. I then began work as a marketing manager for a software company until I left that job last month.

What changed?

In 2009, Money Under 30 was ready to be worked on full-time, only I wasn’t ready to do it.

I had just moved to a new city. I was getting married. I had repaid most of my debt, but I needed to save a lot more before feeling comfortable being self-employed. And I’d soon be a dad.

I know that some people would’ve made the leap sooner. But, then again, some people wouldn’t make the leap at all.

I admit, I hesitated.

I liked having two incomes. (Indeed, I still believe in diversification, and will be consulting with my old employer and some other contacts to ensure my livelihood isn’t 100% dependent on this blog).

Ultimately, however, I’ve always known that I wouldn’t be truly happy unless I were working for myself. It’s a personality thing. Some people work well—or at least tolerate—working under supervision. I can’t. It makes me resentful, even angry. I would get the worst cases of road rage because of how much I dreaded marching into work for 8:00 on somebody else’s schedule. And I’ve had GREAT bosses. I’ve gotten along with all of them. They’ve been nice people and competent managers. But that doesn’t matter. I just need set my own hours, and most importantly, go at my own creative pace. If I want to be working on A but you tell me to do B, I can’t do it. I simply can’t. If I try to focus on B, I’m too busy thinking about A and won’t get anything done. Despite all this, I waited to take this risk because of the same reason people don’t ask strangers out, ask their boss for a raise, or make any big change in life…

…fear.

Not fear that that I wouldn’t succeed on my own. Of that, I’m quite confident. But the fear of what other people think. The fear that my parents would think I’m throwing away a “real career”. The fear that my friends would think, as a blogger, I must just be sitting on my ass eating bonbons all day.

This is the worst kind of fear, of course, because it’s totally irrelevant. If you’re skydiving and afraid your chute might not open, at least that fear serves a purpose; it might remind you to inspect the parachute.

The fears that prevents us from taking little risks in our daily lives, however, are mostly unnecessary. Unfortunately, that doesn’t make them any less paralyzing, and you need to overcome them.

Ultimately, in order to take the risk I needed to take, I had to face my fears. My friends and loved ones can think what they want. I don’t care. I’m doing what I love, and I’m far happier because when I get up every day, I get to work on creating my own material that will help you. And that’s awesome.

WHAT RISK(S) WILL YOU TAKE?

That’s my story, but I want to know: What risk(s) will you take this year? How do you expect it to change your life? Share with us in a comment. (And when you follow through, don’t forget to circle back and let me know how it worked out.)

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I was psyched to see how many of you wrote back saying you enjoyed the advice.

If you only saw the subject line or skimmed the email, you thought “oh it’s Thanksgiving and this guy is thanking me for reading his blog and reminding me to be thankful, blah blah blah.”

But if you actually read the email, hopefully you saw that there was a really useful nugget of wisdom contained within. I shared one simple technique that researchers have found will improve your mood, health, and finances (and it takes less than 10 minutes a week).

If you want that tip, you’ll have to subscribe. But I will tell you that last week’s email was about gratitude, and how grateful people are happier.

I shared that email (and the actionable advice) because it relates to the thing I find most interesting about personal finance—our individual relationships with money.

WE ALL COMPARE

What I’m about to tell you used to really piss me off.

Two of the most searched for and commented-on articles on this blog are:

• How Much Should Be In Your 401(K) at 30?
• How Much Should You Have Saved by 30?

I wrote these posts because readers are always telling me they want benchmarks. We all want to know “how we’re doing” compared to national averages or, more importantly, compared to other people our age.

So I gave them what they wanted. And then I regretted it.

If you read some of the comments on the two posts above, they get nasty. So nasty, in fact, that I closed them down on the 401k post. Here’s the start of one string:

Josh: I currently contract overseas, I have about 105K in saving and 20K in low risk investments. My 2001 car has been paid off and I have no debt. For being 25 with only some college and prior military I think I am on the right track.

Blake: lol! you are all liars… and i have 84 million under my mattress. you can’t even spell ‘savings’ correctly.

This degrades quickly into an immature barb-fest with more comments spent mocking other readers’ spelling than offering intelligent insights. In hindsight, I should’ve deleted more of them. But the pattern is interesting.

Many readers comment that they earn six figures at an early age (24, 25, 26 etc.) and already have a sizable amount saved. Many of them then ask others to validate that they’re doing well. Almost immediately, others earning far less want to shout out “yeah, Asshole, you’re doing fine.” Many people don’t put it so nicely.

What does this tell us?

• We love to compare ourselves to one another.
• We love to discover that we’re better off than other people.
• We love to hate people who are better off than we are.

So I used to read comments like this and get angry. I got pissed that people seemed to gloat about how much money they made and then I got pissed that people wrote such nasty responses (hiding behind anonymity of course).

I still don’t condone people gloating about their riches or trashing others for their financial situation, and I’m more quick to delete comments that are mean than I used to be. But I’m starting to understand where these comments come from.

We all want to feel like we’re better off than our friends.

For some of us, that means earning more money, or having a higher net worth.

For others, it means believing that the decision to be a math teacher instead of a hedge fund manager is more honorable and enriching.

And there is science behind this. When we reflect on ways that we’re better off than other people, we’re happy. But when we dwell on ways that we’re less fortunate than others, we get jealous, depressed, angry, etc.

As an example, research shows that money only makes you happy if you’re richer than your neighbors. People who have high incomes compared to others in their neighborhood are happier whereas people who earn less than their neighbors are less happy.

Knowing this, it seems we have two choices.

1. Actually get richer than other people (or at least focus on the ways we are “richer” than other people).
2. Stop comparing.

The latter choice is not new advice. It’s in the Ten Commandments! Don’t covet your neighbor’s house. But we’re so bad at it. Just read those comments.

If you truly want to be richer than your friends, stop comparing yourself to them.

But because that’s not easy to do, here are some other things you can do as well.

FOCUS ON WHAT YOU HAVE, NOT WHAT YOU DON’T

Let’s talk about the Occupy Movement.

I support it.

In the United States (and Europe too), the Middle Class is disappearing. I believe this presents a grave threat to our economic future. Without what economist Robert Reich calls the “basic bargain” in which employers pay their employees enough to purchase the products they produce (and a modest home, car etc.), people don’t spend money. And when people don’t spend money, small businesses can’t grow and create jobs, leaving more people without jobs at all. Wealth stays in the pockets of corporations and the superrich, and the average person gets poorer.

That said, let’s look for a minute at the movement’s motto: “we are the 99%”.

In the United States, you can earn a boatload of money and still be in the 99%. (I’ve heard various stats, but it sounds like the threshold of the 1% is an annual income of somewhere between $350 and $400k a year.) Of course the implied 1% are actually the 0.1% who earn much more than this…millions and billions.

But let’s stop for a moment and put things in perspective.

In 2011, the poverty line in the U.S. is $10,890 for an individual. Not a lot of money. In the U.S., it would be damned hard (impossible?) to survive on that.

But believe it or not, somebody earning $10,890 a year falls within the richest 13.12% of the world according to the Global Rich List.

And, if you make $47,500 a year or more, congratulations, YOU are in the richest 1% on a global scale.

This may not be comforting to the thousands of unemployed and underemployed college graduates. Nor the single mother whose sick child’s medical bills put her in bankruptcy because her job doesn’t have health insurance. Or the seniors on fixed incomes facing rising medical costs and reduced benefits. Nor the small business owner who is frustrated because she pays more federal taxes than corporations including GE and ExxonMobil.

But you—my readers—can use this.

Whatever your current financial challenges, start every day by focusing on what you have, not what you don’t.

You’ll worry less. You’ll spend less. You’ll be happier.

You’ll be in a better position to work towards your financial goals.

ACT, DON’T OBSESS

It’s good to have financial goals.

Money is not inherently evil.

Our desire to earn an honest buck is the oil in our economy’s engine.

Striving to earn more money because you want to be rewarded for your hard work is different than lusting after the car your friend drives. Money—and the quality of life money can buy—is a perfectly acceptable reward for hard work.

So if you want to earn more money, stop comparing yourself to others and stop hating people who have money.

Instead, figure out what one thing you can do to earn more and do it.

• Example 1: Spend the next three months focusing on high-value activities at work. Create a portfolio of your results. Ask for a raise.
• Example 2: Take a skill and turn it into a freelance business. Email five people you know who might need your services. Instead of outright selling to them, ask if that “kind of service” would ever be useful and if so, what exactly would they want? Then take their answer and offer to do it for them.
• Example 3: If you’re unemployed, underemployed or in a truly dead-end job, commit to doing what it takes to change your situation. It’s a brutal world out there, but my readers can beat it. Change cities if you have to. Network like mad. Offer to work for free for a month.

Why is this post titled “how to be richer than your friends?”

Because it got you to read it. We all play the comparison game. It’s human nature. But if you want to be more successful (and happier), turn it off.

Focus on what you have, not what you don’t. Focus on what you need to do to get where you want. Do it.

###

Einstein was a smart guy, and he knew the importance of something that we are terrible at today: How to focus on one thing at a time.

Today, let me know in comment: Right now, what’s your #1 financial goal?

If you’re not sure, I’ve created a new workbook to help you figure this out. It’s totally free to email subscribers. You can learn more below or sign up now.

We are the “do-it-all” generation. And unfortunately, all this multi-tasking does us a disservice.

For one, it’s difficult to do any one thing well when doing many things at once. (Be a good kisser or drive off the road—your choice).

Even worse, focusing on too many goals at once can mean we don’t get any of them done. This problem is made worse if any of these goals conflict with one another.

The book Willpower: Rediscovering the Greatest Human Strength points to research by psychologists Robert Emmons and Laura King that identified three main consequences of conflicting goals:

First, you worry a lot. The more competing demands you face, the more time you spend contemplating those demands. You’re best by rumination: repetitive thoughts that are largely involuntary and not especially pleasant.

Second, you get less done. It might seem that people who think more about their goals would also take more steps to reach them, but instead they replace action with rumination. The researchers found that people with clear, unconflicting goals tended to forge ahead and make progress, but the rest were so busy worrying that they got stuck.

Third, your health suffers, physically as well as mentally. In the studies, people with conflicting goals reported fewer positive emotions, more negative emotions, and more depression and anxiety. They had more psychosomatic complains and symptoms. Even just plain physical sickness, measured by both by the number of visits to the doctor and the number of self-reported illnesses over the course of the year, was higher among the people with conflicting goals.

The first takeaway from this research is that your goals should be in harmony. But a subtext is that it doesn’t hurt to focus on one thing at a time.

Over the years I’ve given some advice about how to set and prioritize financial goals that advocates targeting multiple things at once. For example, I commonly suggest that you should contribute a small amount to a 401(k) if your employer matches those contributions even as you try to get out of credit card debt.

After recent conversations with readers and some books I’ve read, I am starting to recommend people focus on one financial goal at a time.

To help you determine just what that goal should be, I’ve created a 5-day program designed to help you reflect on your beliefs and values, identify financial problem areas, transform dreams into financial action items, and prioritize your goals so you can attack one at a time.

INTRODUCING ‘RICHER BY THE WEEK’

Richer by the Week: A Simple 5-Day Plan to Take Control of Your Money and Your Life is a 5-day program I’ve designed to help you do two things:

• Stop wasting time on the wrong goals and focus your energy on the one thing that’s important now.
• Stop dreaming and start doing. (Get off your ass.)

Richer By The Week is a workbook that you’ll use for about twenty minutes a day for five days.

• The first two days you will spend aligning your financial goals with your values (not somebody else’s).
• On day three, you’ll take concrete steps to simplify and automate your finances.
• On days four and five you’ll work on choosing the one goal to focus on. Then you’ll get to work on it.

Anybody can write a bunch of goals. But you have to be sure they are the right goals. And then you have to get things done. In this workbook, I’ll help you do both.

Get my five-day course on crushing your goals here:

(Cant’ see this form? Go here.)

PS: After you go through the workbook, let me know your #1 financial goal in a comment.

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3,500 feet above the sleepy small towns of Maine’s Oxford Hills, I nudged the yoke on the rickety old Cessna 152 and banked into a lazy left turn back toward the airport after the day’s flying lesson. As much fun as I was having, I was relieved the hour was almost done—simultaneously keeping track of altitude, airspeed, heading and other factors is mentally exhausting, even more so when you’re just learning. But little did I know, my lesson wasn’t over yet.

Mid-turn, my flight instructor yanked the aircraft’s throttle back and the small plane’s lone propeller slowed as the engine came to an idle.

“You just lost your engine,” he said. “What are you going to do?”

My instincts told me to reach over and try the ignition; try to restart. Or maybe call “MAYDAY! MAYDAY!” over the radio.

But both of those instincts were wrong.

If your plane loses its engine, the first thing you want to do is find a place to land. Then you want to adjust your airspeed to give you the most gliding time to the ground. Only then should you attempt things like restarting the engine, switching to a reserve fuel tank, setting an emergency transponder code, and calling for help.

That’s a lot to remember on a good day, never mind when you’re minutes away from a crash landing. And this is in a tiny, uber-simple 40-year old trainer aircraft. Imagine the procedures in a modern airliner.

This is why pilots use checklists.

Aircraft are too complicated—and the potential cost of an error too high—to be left to pilots’ memory.

As I progressed in my flying lessons, I learned to use checklists for everything: takeoff, landing, and, of course, simulated emergencies. Not only would the checklist remind me of what to do first (find a place to land), it would ensure I didn’t miss a step. (Don’t forget to try to restart the engine before plowing into a corn field!) As it would turn out, checklists have intriguing uses far outside the cockpit.

I’m not telling you this story to lure you into learning to fly. As a financial decision, using a $3,500 credit card balance transfer check to earn my pilot’s license at 21 ranks among my most absurd. But unlike the countless Papa John’s pizzas and liters of bottom-shelf vodka I also financed during college, I can’t say I regret the learning to fly experience.

Today I want to talk about how checklists can help you stay on track with your financial goals. 

IN PRAISE OF CHECKLISTS

Atul Gawande is a surgeon, Harvard Medical School professor, and author. His most recent book, The Checklist Manifesto: How to Get Things Right got its start as this New Yorker article in which he explains the origins of the checklist in aviation before proceeding to document how—if more widely used in medicine—checklists could save the average hospital countless patient lives and millions of dollars every year.

In The New Yorker piece, Gawande makes this observation about how checklists helped an intensive care unit reduce the number of infections related to central lines:

The checklists provided two main benefits…First, they helped with memory recall, especially with mundane matters that are easily overlooked in patients undergoing more drastic events. (When you’re worrying about what treatment to give a woman who won’t stop seizing, it’s hard to remember to make sure that the head of her bed is in the right position.) A second effect was to make explicit the minimum, expected steps in complex processes…Checklists established a higher standard of baseline performance.

These observations are a bit obvious, but the results Gawande cites are eye-popping. The simple fact is that checklists save lives. So I postulate: If checklists can save lives, surely they can save money.

A CHECKLIST FOR YOUR FINANCES

As much as I and other financial bloggers try to simplify financial matters, the truth is: money is complicated. No two people’s financial situations are alike, and every day we’re overwhelmed with competing financial goals and ways to spend or save our cash. And investing? Forget about it. There are over 10,000 mutual funds alone, never mind stocks, ETFs, bonds, and countless other investment vehicles. It’s no wonder so many of you just want somebody to tell you what to do!

I can’t do a personalized financial checkup for everybody, but what I can do is provide a checklist to help you periodically review the state of your finances. Take a look, and let me know how you do.

If you prefer, here is a PDF version to download »

Emergency Fund

• I have enough cash saved in a separate savings account to get me through six months of living expenses in the event I lost my income.
• I’m earning the best interest rate possible on this money by taking advantage of an online savings account.
• I don’t tap my emergency fund for “non emergencies” like months I accidentally spend too much on credit cards.

Credit Card Debt

• I am not going into new credit card debt. I pay off my new balance in full every month.
• If in debt, I know my interest rate.
• If in debt, I have tried to lower my interest rate either by calling my card issuer or transferring the balance.
• If in debt, I have a plan to pay off this credit card debt before putting money to other goals.
• If not in debt, I take advantage of credit card rewards.
• If not in debt, I understand my card’s fee schedule.

Student Loans

• I understand how much student loan debt I have.
• I know the interest rate, term, payment, and owner of each of my student loans.
• I have my student loans set to automatic payment each month so I don’t miss a payment.

Saving

• I know what one thing I’m saving for next.
• I contribute at least enough to my employer’s 401(k) or other retirement plan to take advantage of any matching.
• If eligible, I contribute up to $5,000 to a Roth IRA.
• I have a certain amount of savings on “auto pilot”. In other words, I transfer or direct deposit money automatically to a savings account each week or pay period.

Investing

• My money is invested in a mix of stocks and bonds appropriate for my age and risk tolerance.
• I understand the fees associated with all of my investments and am comfortable with them.
• I am taking advantage of tax advantaged accounts (IRAs, 529s, etc. before investing in taxable accounts).
• I do not have idle cash that should be invested.
• I have decided on an investing strategy that I will stick to even when the markets are volatile.

Expenses

• I know what I spend my money on each month.
• I don’t have any unused subscriptions that I could have money on but I’m too lazy to cancel.
• My monthly housing payment is less than 30% of my gross income.
• I don’t have a car payment.
• If a homeowner, I have investigated refinancing at lower interest rates to save money in the long term.
• I make lists and look for coupons to save money on routine shopping trips.
• I plan big purchases and wait for sales to buy.

Credit

• I know my current credit score, at least roughly.
• I have checked my credit reports at least once in the last year for accuracy.
• I auto-pay or otherwise have a system for paying all monthly bills on time.
• I have 2-3 credit cards open for building good credit, even if I don’t use them every month.

Relationships

• I regularly have open conversations about money with my partner.
• My partner and I know each other’s net worth and credit scores.
• My partner and I have joint financial goals.

Income

• I have a second stream of income or a plan for diversifying my income.
• I’m actively learning or increasing my skills and value to my employer.
• I’m actively building my network.

Other

• If I have children or a dependent spouse, I have level term life insurance.

HOW DID YOU DO?

How’d you do? Did anything surprise you? Is there anything you would add to this checklist? Let me know in a comment.

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Julia is a single, 26-year old account coordinator for an ad agency living in a suburb of Washington, D.C. Here’s her situation:

I have $8,000 in credit card debt that I’ve been burdened by for almost eight years. I can’t seem to get rid of it. I only make $35,000 from my day job and am always doing odd jobs (house sitting, pet sitting, selling stuff, tutoring) to make extra money but it all ends up going towards necessities like food and gas.

I try to stick to a pretty strict budget of less than $25 a week for groceries and don’t allow myself to go out and have fun very much. There always seem to be extra expenses that I don’t plan for that take up all or most of my extra income. I am not saving as much as I would like nor am I contributing as much as I would like to retirement (currently 8%). I would love to…get rid of this debt so I can move on with my life and enjoy the rest of my twenties in financial peace.

I’ll bet you can relate to Julia if you:

• Are not earning a ton
• Have some debt, but it doesn’t seem like that big of a deal
• Are not making progress with your money

So before we go anywhere, let’s point out that Julia’s had that credit card debt for eight years! And whether she realizes it or not, here’s why:

The balance [on my Chase card] is about $5,000 with a minimum monthly payment of $100. I ALWAYS pay more than that but then it seems to creep back up and stay around $5,000; maybe because I get overzealous and pay too much and then have not enough cash left over to buy necessities.

Bingo. I used to do this for years. When it comes time to make that credit card payment, you think “I’m gonna be good and pay $200 extra.” But then something comes up (it always does) and you want to spend $200 later in the month, so you charge it back to the card. This is what credit card companies hope for, and it’s what keeps them making profits and what keeps you in debt.

Before we jump into some potential solutions for Julia, let’s take a look at the rest of her finances.

JULIA’S FINANCES

Here’s a breakdown of Julias’ income, expenses, assets, and debts: 

*In her take-home income, I’ve included the $250-300 she makes on top of her day job. For simplicity, I haven’t asked Julia for a detailed breakdown of “other expenses”. But based upon what she’s told me, she’s spending most of (if not a bit more than) her remaining income each month.

Julia’s Net Worth

Notes

• With only $300 in the bank, Julia’s living paycheck to paycheck. If any big expenses come up, she’ll need to use a credit card to bail herself out. And if she lost her job, she’d really be in trouble.
• The credit card debt has to go.
• In the plus column, Julia doesn’t have any student loan debt and she has started contributing 8% of her salary to her 401(k) at work.
• It’s also great she’s earning extra money, but still Julia’s debt isn’t going anywhere which means she’s spending it as she earns it.

MY RECOMMENDATIONS

I think Julia needs to tackle her finances one thing at a time. Julia’s margins are thin. This is going to be about little wins every couple of months that over time will add up.

When I asked her about her financial goals, Julia listed many:

• Increase 401(k)/Roth contributions.
• Pay off debt (mostly just credit card).
• Have a fun fund (for vacations, nice clothes, toys etc.)
• Have an emergency fund (in case I end up with no job or something terrible happens).
• Buy a house/condo by the time I’m 30 (27 now) or at the very least be renting a place on my own.

I’m going to recommend she reprioritize that list and then focus on one thing at a time.

1. First, get a cash buffer. I think Julia should increase the amount of cash she has on hand so when life’s small emergencies come up, she doesn’t have to turn to credit. So I’d like to see her start a savings account if she doesn’t already have one and put about $800 in there. I would even stop paying extra on the credit cards for a couple months until this is done.

2. Attack the credit card debt. The next step (or a simultaneous one), is to pay off the credit card debt. I’m going to recommend Julia put off all other goals, like increasing retirement contributions or other saving, until the credit card debt is gone.

Given the credit card market right now, she may be able to save some money by transferring balances (at least the Nordstrom card at 18.9% APR) to a card with 0% APR for 12 months or more. Assuming Julia’s credit is good, I would encourage her to apply for a card and transfer as much of her balances as she can—starting with that store card. She’ll pay a fee to do the transfer, but given how long it will take her to pay off the balances the fee is worth it.

Now, assuming at least a partial balance transfer was successful, two rules:

• DO NOT use the new credit card—it’s just for the balance transfer.
• CUT UP the other old credit cards.

This Is Important!

Given that Julia’s credit card debt has been around for eight years, this might be time to ditch the credit cards altogether in favor of a debit card until the debt is gone.

But Julia, if want to keep using your Chase card for everyday purchases, here’s a new rule for you: Your monthly payment should be at least the total of the new charges you put on the card plus the minimum payment. This will get you in the habit of paying for your monthly charges in full while still whittling away at your debt.

If you don’t transfer any of the balances, that’s fine. Here’s what we’re going to do:

1. Put everything you can to paying off the Nordstrom card. Make it a goal to see how fast you can do it. If you do some odd jobs, maybe even sell some stuff, can you pay it off in three months ($500 x 3)?
2. Next, tackle the $1,100 balance.
3. Once you’ve knocked off those two, go after the biggest balance. It’ll take time, but it’s worth it.

3. Make a plan to earn more. Julia’s already doing a good job of supplementing her income with odd jobs, but even with this extra cash she’s still coming up short. She needs to get out of this credit card debt and save more for the future, but I get the sense she doesn’t want to take a vow of poverty for two years to do it.

So in addition to getting out of debt her long term goal should be to stabilize her expenses and earn more money so that the extra income can go to saving.

Money Making Ideas

In our email exchanges she hints at lots of ideas for earning more, both freelance and in her career. She says:

I earn between $250 and $300/month being a personal assistant for a VP of a large, well-known company. (This amounts to about 5-10 hours of work per month which I think is AWESOME).

This is very cool, my question would be…can you do more of it? Can you expand your services and charge more? Are there things you do really well. Specific things? Can you offer these to new clients. VPs of large companies will pay big bucks for stuff they don’t want to/have time to do.

Occasionally I babysit and charge $15-20/hour but this is sporadic and I don’t count on the income.

A nice income booster but as you said, sporadic, and you’re never going to earn much more than that per hour. I’d take it when convenient but focus on other opportunities.

I have a tutoring gig for the summer which is $20/hour but only one hour per week.

This one is better. Can you advertise and take on new clients? If you specialize in tutoring for one particular subject/test, etc., I’ll bet you could charge them more, too…even double that rate.

I’ve been spending time teaching myself design programs in the hopes to get freelance design work or maybe eventually start a blog (no idea what it should be about yet though…TOO many ideas to nail down).

Beware there are lots and lots and lots of hungry designers with MFAs and big portfolios and lots and lots and lots of bloggers. If either is your passion, charge ahead, but be careful if you’re thinking you’ll teach yourself Photoshop and overnight end up with $100s of dollars of freelance work.

Career Ideas

As for Julia’s day job, she hints in her emails that she doesn’t hate her job but doesn’t sound confident about long-term growth or stability. She says that based upon friends’ salaries, she thinks she could be making significantly more. She’s applied to some jobs in the past couple of months but finds it hard to keep the momentum of job searching up with everything else going on.

We could write another post about career planning, but to keep it short I think you’d described that it’s time to start looking for the job you really want (and hopefully it’ll pay more). You’ve got something a lot of people would kill for these days—a job in your field that pays the bills—but you know you’re capable of more. This first step is to define what you want, then make a plan to go after it. This means making lists of companies you’d like to work for and setting up lunches with people you know who work there. If you chip away at it, the right job may come around when you least expect it.

JULIA’S MONEY REPORT CARD

Here’s how I think Julia’s situation stacks up, right now.

Julia may find this assessment harsh, but the reality is Julia is an illness or lost job away from financial disaster. The good news is it won’t take much to improve this picture. The keys for Julia are to:

• Get some more cash saved so a small emergency doesn’t ruin you.
• Get rid of the credit card debt.
• Focus on ways to stabilize expenses and increase your income so over time you can put more and more to debt repayment and saving.

On the plus side, Julia’s housing costs are controlled (the upside to roommates), she has an idea of where she wants to go, and she’s working on getting there. I think the biggest thing she can do is to focus her efforts on knocking down one goal at a time.

What do you think? What advice would you give Julia? Share your thoughts in a comment.

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After spending 27 years independently maintaining my finances, it’s been a bit of a shock to my system (and I’m sure for him, as well). But, we’ve been talking about and planning for the switch for awhile now, so I think that softened the blow a bit. Three months is hardly enough time to know exactly how our combined finances will change and evolve over time, but I think we’ve both learned a lot thus far…

A PERSONAL DECISION

Combing finances with someone is a personal decision that requires a lot of thought and discussion. My husband and I had talked openly about our finances when we were dating and had always planned to combine after we were married. We made the decision based on many factors (we were sick of splitting checks everywhere we went, for one), but the biggest deciding factor was that we wanted to be a team; what was good for him would be good for me and vice versa. As a team, if we struggled, we would struggle together.

THE PERKS

My husband jokes that the biggest perk of combined finances is being able to say “this is on me” every time we go out to dinner (hilarious, I know). But I’d think we agree that the best part of combined bank accounts is that we truly do feel like a team. We make our spending and saving decisions together. This has made us a closer, strongly couple and family…and that’s important in a fledgling marriage.

Other perks include, of course, the fact that we don’t have to split bills anymore. We made a short out-of-state trip for a family wedding recently and, when we were flying back home, I realized I hadn’t pulled out my credit or debit card once on our entire trip. And although it was nice that I didn’t have to use my cards, the main benefit was that we didn’t have to tally up splitting the check at a restaurant or in a parking garage.

WHAT WE’RE LEARNING 

The biggest cause of bickering has been budgeting and spending habits. My husband has always been a very meticulous budgeter, spending Sunday afternoons documenting our spending from the previous week. This has clashed with my habits because I don’t follow a strict budget. I did for a short time when I was paying off debt, but now I just try to avoid thoughtless spending and always look for the best deal.

This has created debates because my husband thinks that everything we buy (from a house to clothing to small miscellaneous expenses) should have a designated “fund” in our budget and we should save for it prior to purchasing it (which is obvious for a house, but doesn’t make sense to me for little things).

I tried to tell him to create an “Amber Fund” in his budget so I could spend on things as I need them, but he looked me like I was a crazy person (the vast differences between a budgeter and a non-budgeter). So, that issue is still a work in progress.

Even though we don’t necessarily agree on budgeting, we’ve made it a point to not criticize each other’s spending. We both have modest spending habits and we both look for good deals on whatever we purchase. Although my husband doesn’t understand the concept of an “Amber Fund” (yet), he hasn’t criticized my spending or told me to cut back on anything. And I’ve done the same towards his spending habits. I think that this easy-going practice might not work if either of us spent more money than we make, but we’re both modest spenders that always spend much less than we earn.

Right now, the biggest impact on our finances is our plan to purchase a house. We’d each been saving separately before we married and we combined our house savings funds after our wedding. We plan to buy a home in a couple months and it has been fun to monitor our savings accounts together (when just a couple months ago, they were separate). Buying a home will be our first big joint purchase and with home ownership will surely come loads of new expenses and experiences.

SOME PRACTICAL TIPS

Everyone’s financial situation will be different, but we did learn a few things that would apply to everyone as we were combining bank accounts:

• Figure out which bank you’ll be switching to long before the wedding. The wedding and honeymoon are such a whirlwind, so it’s hard to make this decision during that time. You might call each of your bank’s and ask them about switching accounts or adding another person to help make a final decision.
• Try to go to your bank during non-peak hours. We were able to go to our main bank the day we returned from our honeymoon during the early afternoon. There wasn’t a wait and we were the only customers there, so it made the process much easier.
• Consider your name change. If you’re going to change your name after the wedding, it might not be complete when you’re in the midst of combining finances. Make sure you tell your bank about this to avoid confusion.
• E-mail your online banks or check FAQs. Combining our online accounts was extremely easy and took only a matter of minutes. If you’re unsure about the process, e-mail their support team and you’ll probably receive step-by-step instructions the same day.
• Discuss money management prior to the big day. I’m always amazed to hear how many of my friends didn’t discuss finances before they were married. Make sure to iron out any issues and get on the same page before the wedding to avoid any surprises.

WORKING AS A TEAM

As I mentioned earlier, the best part about combined finances (for us) is that we’re doing everything together. You really feel like a team. It can be scary to let someone have access to all your hard-earned savings and income, but it’s also exciting to know that you’re planning your financial future together—for better or for worse.

That’s what we did, although I know everybody’s different. Have you recently changed how you handle joint finances? What changed? How’s it working out so far?

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As you may know, I’m not a big fan of budgeting…at least the old fashioned way of manually writing down every penny you spend and rifling through receipts every month.

But that does not mean I don’t track my money!

For one, I use one rewards credit card for 95% of my purchases (including monthly bills when possible) so at the end of the month, I have a single record of my spending all ready for me…my credit card statement. I compare this to what I want to be spending (my budget) to see if I’m over or under.

But there’s one problem:

Monthly budgets aren’t that useful.

True, we pay a majority of recurring expenses like rent, debt payments, and utility bills once a month. But for me, a good chunk of the money I spend annually goes to things that I don’t pay for ever month like:

• Car and life insurance (2x a year)
• Auto and home repairs (whenever)
• Vacations (1-2x a year)
• Holiday gifts (1x a year)

For this reason, I find that monthly doesn’t account for this stuff. Because of that, I’m way over my budget some months and under some other months.

I believe that if you’re going to ensure that you’re regularly living below your means and building wealth, you need to track your net worth.

WHAT IS NET WORTH?

Your net worth is a measure of your finances calculated by taking the sum or your assets and subtracting your liabilities (debts). So in a very simple example, if you have $10,000 in the bank and owe $2,000 on a credit card, you have a net worth of $8,000.

Your net worth can be negative. If you only have $1,000 in the bank and a $2,000 credit card balance, you would have a net worth of -$1,000.

Obviously, you want to build a positive net worth, although if you’re starting out in life with student debts and not a lot of savings, yours will probably be negative for a while. That’s OK. (Mine was until I was about 26).

Your net worth is less important than your net worth trend. It’s important to ask: Is my net worth going up or down this month? What about this year?

Obviously, you always want it to go up.

TRACKING YOUR NET WORTH

Calculating your net worth is easy. You simply add up all of assets and all of your debts and subtract your debts from your assets. It’s important to remember, however, that your net worth changes all the time. Your net worth is like a snapshot of your finances at a given point in time. 

To track your net worth, you compare a recent snapshot to an older one and see what’s changed.

For example, when you compare this month’s net worth to last month’s, these are some things that may be different:

• You’ve spent some money in your checking account.
• You’ve deposited $500 to savings.
• You’ve paid $200 in principal towards a credit card balance.
• Your 401(k) gained 2%.

All of the changes add up to either raise or lower your net worth. As you track it, you want to see that it’s going up almost every month. If your net worth slips for a month or two because of a big purchase that’s OK as long as it’s still going up over a longer period of time. What you don’t want is a net worth that doesn’t change or slowly goes down. That means you’re living above your means and headed for financial trouble.

What’s Included in Net Worth?

Everybody has a different opinion of what assets to include when you calculate net worth. You’ll always include cash, bank accounts, and investments, and usually any real estate. Sometimes people will include cars and other big ticket belongings…personally I don’t because although you can sell your car for cash, making it an asset, cars depreciate over time and shouldn’t be considered part of your wealth.

As for debts, the rule I use is if you owe it, include it. This includes credit card balances even if you pay them in full every month, and it might include taxes you’ll owe at the end of the quarter or on April 15th.

USING THE SPREADSHEET

It’s my hope that this spreadsheet is easy and self-explanatory. You can edit the row labels to match your accounts and add rows as needed. The formula cells are locked so you don’t accidentally break them. If you have comments or suggestions, please leave a comment!

Download Now: Free Net Worth Spreadsheet Template

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This reader (I’ll call him Cal) is an over-saver.

For Cal, living frugally and saving money is so second-nature that it’s actually difficult for him to spend money, even though he has plenty.

As you might imagine, oversaving won’t make you happy.

So not only is it OK to spend money on things that will make you happy now and then, it’s the right thing to do! I believe a big difference between people who are self-assured about their spending and those who aren’t (because they’re either spending too much or not enough), is that the self-assured spenders are spending with intention.

I explain what I mean below, but first, here’s Cal’s story:

I’m blessed to have two parents who have been pretty cheap throughout their lives. My mom worked at home only because my father is an MD. During my years growing up, I never saw them become flashy with their wealth. Heck, my father drove a 1984 Ford Bronco until 2003.

Due to my father’s hard work and saving habits (must run in my family, as his father is the same way), I was able to attend a private Catholic school without taking out loans (though I did get awarded a scholarship that offset a full year of tuition and expenses).

After I graduated, the job I took and am still in is a bit under my abilities as a CPA and definitely under my potential pay grade. Part of the reason I stay here is because of the comfort and ease of life it allows me, but second, because I emerged from college with no debt, I figured I could make up the salary differential by saving and investing more than my peers could with their college loans to pay off.

I currently max out my 401(k) and my Roth IRA.

Although my take-home salary is pretty decent, I’m living  below my means, both in terms of quality of household and not splurging or vacationing. Most of the time, after expenses, I still take my remaining funds and invest those too.

Right now, at 30, I have over $225,000 in invested funds, with over half in my 401k ($138k), another $58,000 in the Roth, and the rest in non-retirement funds.

The problem I have is allowing myself to ease up on my savings.

I would like to own a house soon and I’m getting close to needing a new or used car…but I know if I lower my savings percentage, I’m not going to max out my 401k contributions, which I consider to be a “missed opportunity”.

Aside from those future expenses, I often worry about having enough “emergency funds” since my non-retirement funds would essentially buy a new/used vehicle outright or be a significant chunk of a down payment on a house.

I’ve known others like Cal, many of whom mastered being frugal during a period of life when they really needed to be. Years later, as they become debt-free and now earn a decent living, they still can’t bring themselves to start buying the things they want.

In my experience, this feeling is natural to some extent. As you move from being in debt to saving money, you don’t want to go backwards. Seeing your balances grow becomes a bit addictive.

In Cal’s case, however, he’s already invested enough that he could have over $3 million by age 65 even without contributing another penny (assuming an 8% average annual return).

Maybe that’s enough for Cal’s dream retirement or maybe not, but the point is, he’s got his long-term saving covered…and then some. Maybe he needs to shift some of his investing to short-term savings so he can spend money and still have cash for emergencies.

Whatever Cal’s decision, it reminds me of this simple point:

The key to financial balance is to both SAVE and SPEND with intention.

INTENTIONAL SAVING

You probably have plenty of reasons for wanting to save money. These might include:

• A rainy day fund for emergencies.
• A new home (or improvements to your existing one).
• Travel.
• Retirement.

Most likely, at any point in your life, you’ll be saving for more than one of these goals at once. If you’re not careful, it’s easy to let all the things you need to save for overwhelm you. As a result, you may become obsessed with saving more and more because, simply put, there’s always something to save for!

If, however, you become more intentional about your saving, you’ll take each goal and determine:

• How much money you will need.
• When you will need the money.
• How you will invest the money.

Once you have done this, you can determine how much you need to save. If, however, you discover that you’ll need to save more than you’re able at the moment, that’s OK. Maybe it’s simply time to revisit your savings goals:

• Can you reduce the amount you need?
• Can you push off the goal?
• Can you earn a better return on your money?

When you save with intention, you’ll have a better chance of getting the things you want out of life, but you must also realize that along with intentional saving comes intentional spending.

It’s my simple rule of financial planning:

Save money for later, but spend some today. Odds are good you’ll live to 90, but you really could be hit by a bus tomorrow!

INTENTIONAL SPENDING

What makes you happy?

• International adventures?
• Good food, good drinks, and good friends?
• The latest technologies?
• That new car smell?

Note: If your sole answer is making lots of money and seeing it pile up in your bank account just because, you could have a money disorder. This is financial hoarding. (Seriously.)

And if you can’t immediately answer that question, then let’s rephrase it. Think back over the last five years. What purchases brought you the most happiness?

For me, it’s been trips and experiences with my family and friends…friends’ weddings in Sarajevo and Puerto Rico, a bachelor party in South Beach, our own wedding and honeymoon.

My car, my iPhone, my camera…these things are nice, too. But over time, I think the money spent on trips and experiences have created more happiness for me.

Still, I know that going forward, I may spend money on new clothes, a newer phone, a bigger TV, etc. And if I’m not careful, soon I’ll be putting off planning my next vacation or passing on joining friends for a long weekend in Vegas because I spent too much on other crap.

Intentional spending is when you determine what makes you the happiest and then plan your finances so that you can afford as much of it as possible.

Here are some examples:

• Dan lives with his parents and barely spends a dime except for $400 a week on two flying lessons in pursuit of his dream to be a pilot.
• Emma earns decent money but drives a 15-year old Honda Civic and rarely buys new clothes but she takes three or four weeks off every year to travel abroad, places like Argentina, Thailand, and Australia. The trips each cost over $10,000.
• Mike is a car guy. He’s chosen to live in a much smaller house than he could afford so he can always have the latest ride. Nothing makes him happier than rolling up to a party and turning heads.

Dan, Emma, and Mike all enjoy things that cost money—big money, in fact. So if they’re not intentional about their saving first, they could obviously become financial train wrecks.  (Of course, this happens to a lot of people who develop tastes for expensive things).

As long as they save intentionally first, however, they know what they have left to spend today. Then, it’s simply a matter of determining how you’ll spend on this, and how much on that. The goal is to plan your finances so you can spend more on what you value and less on what you don’t.

WHICH BRINGS BACK “OVER-SAVING”

If you, like Cal, find yourself having obtained plenty of financial security but are unable to spend money, my advice is to revisit your intentions. What are you saving for? How much will you need? And what will it take to get there?

Next, what would make you happy today? How can you use some of the money you’ve earned to achieve that?

Financial planning is about balancing your needs and wants today with your needs and wants tomorrow.

We commonly hear about people who neglect the “tomorrow” part, but if we’re not careful, it’s possible to neglect the “today” part, too. Both matter.

***

Personal finance is also personal. So let’s hear your thoughts:

What do you intentionally spend money on? Do you have to sacrifices to afford it? Please share in a comment.

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The second most common answer, behind only debt, took me by total surprise.

Then again, I’m not sure why it took me by surprise, because if I had really thought about it, it’s probably the biggest thing I’m struggling with right now, too!

The response was balance.

The open-ended answers took slightly different forms, but there was a clear trend. Here are some sample answers:

• “Balance: I am 26, recently married, 5 years into my job where I want to decide to either kick it up and push for a management role and a raise or become more domesticated and have kids, become a stay-at home mom, and work from home. We are buying our first home now too, so trying to determine where the mortgage payments will come from if I stay home is another big question mark.”
• “I am struggling with finding a healthy work/life balance. I want to work hard to achieve my career and financial goals, but I also do not want to look back in 10-20 years with regrets…It’s an everyday challenge.”
• “Balancing being in a relationship with working.”
• “…balancing all aspects of life while going to graduate school full time.”
• “Balancing working sixty hours a week to save for a down payment for a house and having a life.”

Looking at these answers and reflecting on my own life, I’m thinking…“DUH!”

To be honest, my life is NOT balanced. If I were a train, I’d be getting close to derailing.

Below, I’m going to share the challenges I’m facing with work-blogging-money-life balance, but I’m just one dude. We (myself and other readers) would love to hear about YOU. What are you juggling right now? How does it affect you? What are you doing to find balance?

My Current Balancing Act

My Day Job

Working for a small company and reporting directly to the owner, I stay quite busy, wear a lot of hats, and juggle a lot of projects—everything from developing our Web site, planning marketing campaigns, and following up on leads and making sales presentations.

To be honest, this is the first “day job” I’ve had that—after a year or so—I didn’t want to run from. I think that’s because I enjoy doing a variety of different things, I can immediately see the impact of my work, I really like the owner and my colleagues and—I think most importantly—I feel valued by them.

As long as I continue to do good work, I believe my company can provide me with a challenging, secure, and rewarding career for a long, long, long time. That’s a hard thing to find anywhere these days, but where I live—in Maine—my job is a diamond in the rough.

Blogging

Money Under 30 started as a passion. Call me a nerd, but I love talking money. I love helping others get out of debt, simplify their finances, start investing, etc. I also love writing and building web sites.

And now, Money Under 30 has turned into a wildly profitable side business. Thanks to five years of well-trafficked articles and a few carefully-considered affiliates, my 2010 earnings from Money Under 30 reached six figures. 2011 looks to be even better. Last month, the site received almost 250,000 pageviews, and I’m busting ass to step up the value I deliver and win the trust of even more loyal readers.

Family

Last on this list but first in my heart are my wife, Lauren, and 6-month old daughter, Molly.

Before becoming a dad, I was able to do a good job at work, manage the blog, and still get a lot of quality time with Lauren. Having Molly has changed that because:

• Parenting consumes most of the time I have with Lauren.
• I definitely want more time with Molly than I have.

As every parent knows, there’s no easy answer to finding more quality time with both your kid(s) and your spouse–we can’t manufacture more hours in the week. But I know this problem doesn’t just affect parents…if you’re super focused on school, work, paying off debt, or anything else, it can be hard to find time for friends, relationships, and yourself.

MY TYPICAL DAY AND WEEK

I wake up around 6:30, shower, have breakfast, and get Molly ready for day care.

I leave home at 8am, work, and get home at 7pm. Molly’s already asleep. I have a quick bite to eat with Lauren, before sitting down to work on Money Under 30—some nights just for an hour, some nights until the wee hours of the morning. After going to bed, I may get up at 3am to feed Molly before waking up at 6:30 to do it all again.

I am trying, at least, to keep weekends sacred. I usually only work for a few hours on Sunday nights. It’s the only time of the week I might get some exercise in or—God forbid—a couple hours of pleasure reading . But even our weekends are threatened by the growing list of chores and projects that come with owning a new home.

Why I Need Improve, And How I’m Going To Try

I recently said to Lauren:

“I know, for the time being, I can juggle working, blogging, being a husband and being a dad. My fear is that I won’t be able to do all of those things well.”

And then there are critical things that are blatantly nonexistent in my life:

• Eating well
• Exercising
• Socializing
• Just relaxing!

I’m still young and in good health, but I know I won’t stay that way with my current lifestyle.

When I started working on my finances and writing Money Under 30, I intentionally didn’t want to become one of those people so obsessed with earning money and growing his 401(k) that I let other passions in life slide. Today, I’m realizing I need to take a careful look at my life to see how much that may be happening, and perhaps try to reverse it.

TIME VS. MONEY

In the throes of paying off debt and righting my financial ship, my life was about earning more. The more I earned, the faster I broke free of debt and made up for lost time saving. But now that I’ve achieved my recent financial goals, I’m in the unfamiliar position of being OK on money and short on time.

Don’t get me wrong…being OK with money does not mean feeling rich. Although I’ve built my business and career in a way that has tripled my income in the last three years, I also spent much of that time paying off debt. And then I bought a house and had a baby. Since those big events, we’ve only just recently got our emergency fund where I want it (six months’ expenses) and still have saving to do for upcoming expenses like a car and home improvement projects.

In the game of striking a balance between earning money and growing your career, staying healthy, growing and enjoying relationships and family (and let’s not forget just enjoying life) you are fortunate if you reach the juncture in life when you might value additional free time more than additional money. I’m there, but I face some heavy decisions in the coming months about how to handle it.

I know I need to do a better job of balancing my time and life, the only question is how to get there.

MY COMMITMENT TO IMPROVE

Today, I’m making working on this balance a priority in my life, and because many of you indicated it’s the biggest struggle in your life right now, I’m going to work on this for US. I’m going to dive into time management techniques. Research time-value theories of money. And test strategies in my own life. Periodically, I’ll report back to you with what I hope will be valuable lessons.

In my own life, I’m going to start right now by making the time I need to change my life. That means:

• Prioritizing the important things that are absent in my life, like cooking healthy meals, exercising, and focused relaxation (i.e., not just vegging in front of the TV).
• Emphasizing the quality of what I do rather than the quantity of time I spend doing it (as discussed in my post “Better”).
• Focusing on the present. This is cliché only because it’s so true, and I’m terrible at it. When I’m doing one thing, I’m often thinking about doing something else. If I’m going to get my life in balance, this needs to stop.

What I’m NOT doing is radically change my life in any way at this time. Working and blogging are both activities I find rewarding, and both play an important role in my personal financial plan. My income is diversified in a way that provides better peace-of-mind than even my emergency fund. Should I lose one form of income, I can still go on living like nothing’s happened. And as long as that doesn’t happen, I can save like crazy.

Will I need a break at some point? Absolutely. Could I change my mind down the road? Perhaps. But for now, that’s my plan.

WHAT ABOUT YOU?

What different things are you trying to balance right now?

How are you doing?

I know that at least for me, it’s really helpful to hear what challenges other people are facing balancing different areas of their lives. (I know for example, for many of you it’s not a new baby demanding a lot of your time but a busy social calendar, a new relationship, or graduate school.)

Please take a minute to share your story in a comment we can get a sense of what all of our crazy lives look like. What are you trying to balance right now? How are you managing it? What one thing could you do to improve your balance? Cut something out? Manage your time better? Ask for help? Be specific.

Your response will help others reading this post relate and, hopefully, start you on a track to a more balanced life…

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I’ve done several personal posts recently that have only loosely related to personal finance. I hope you’ve enjoyed some of my stories and this different perspective, but if it’s not your thing, fear not: I’ve got some more hard-core money posts coming up.

In the next couple week’s we’ll look at the best brokers to invest with when you’re just starting out, the true value of credit card points/miles, how to buy houses at auction, and how to analyze your spending in Excel using data collected by Mint.com or other financial software. Don’t want to miss one of these topics? Take a second to subscribe. Thanks!

Photo credit: Beautiful Insanity Photography.