الجمعة، 30 أغسطس 2019
Frugality, Philosophy, and Time Management
In Monday’s reader mailbag, Eric asked a great question:
I find it interesting that you write about things like time management and philosophy on a personal finance site. The connection seems thin at best to me. I’d love to see a post talking about it.
My first line in response was “I don’t think there’s a full post in this subject, but there are certainly a few paragraphs.”
After the article posted, however, Eric and a couple of other readers asked enough follow-up questions that I changed my mind and decided that, indeed, this topic deserved a full article on its own.
So, let me answer Eric’s question from the top.
Frugality Is Resource Management
The idea of frugality is almost always tied to money and maximizing the effectiveness of it. However, I tend to use a somewhat broader definition of frugality. To me, frugality is about maximizing the effectiveness of all of one’s resources. Money is obviously a big one, but those resources also include time, energy, focus, relationships, skills, health, and other things.
The reasoning here is that if you find a way to be efficient with any one resource, it eventually can translate itself into money. For example, if I am efficient with my time and focus when I’m working, I get done with my work earlier than expected. This gives me some extra time to do some meal prepping (saving money directly) or doing something that builds professional skills (helping me earn money later) or exercise (improving my health, reducing health care costs later) and so on.
This works because most of life’s resources can be converted into money, and vice versa.
Time can definitely be converted into money, as you have more time to work or build skills or build a side business or do frugal projects.
Energy can be converted into money because you feel energetic enough to do more in a given day, like do a meal prepping project or finish off a work project.
Health can be converted into money because you’re avoiding health care costs and side effects that can sap your energy and time (which converts into money, as noted above).
Focus can be converted into money because it means more efficient work and usually higher quality work. You get things done faster (giving you more time) and you get things done better, usually increasing the value of whatever it is you’re doing.
Relationships can be converted into money by reducing the expense of help when you need it and increasing your professional and personal opportunities.
Skills can be converted into money by doing things yourself (saving money) and selling those skills and earning money.
Thus, frugality isn’t just about efficient use of money, it’s really about the efficient use of all of those resources (and others).
Best Techniques for Each Resource
Because of that, I think there’s a lot of frugal value in seeking out and finding best practices in each of those areas.
For example, when we’re looking at time management, I use a number of techniques that really help. I constantly have a task list going (I use the program Omnifocus to manage mine). I always have a pocket notebook and pen in my pocket to jot down thoughts and information as they come to me so I don’t lose them. I use time blocking as a way of effectively budgeting my time, and I even use time tracking as a way to more deeply understand my time use. All of this is intended to get maximum value out of my time.
Another great example comes from focusing. I do a lot of things to aid my focus, from mindfulness meditation and writing in a journal each day to listening to ambient noise and alternating between drinking coffee and green tea while I work. These tactics really help me focus in on my work, which means I produce better work in significantly less time than I would if I didn’t use these tactics. They also help me to naturally focus in the moment on things like my family or my friends or on a task I’m taking on at the moment.
I could go through most of these categories and point out strategies I use that I consider to be the best practices for making those categories more efficient. For example, I use a lot of checklists for tasks just so I don’t have to think about them or think about what’s next. The key is that I’m sharing what actually works for me in terms of getting more efficient value out of one of the resources in my life, and that resource can usually be converted to money (or into leisure time, which is as good as money).
People Do Focus on Money
The issue, of course, is that people who come to The Simple Dollar almost always have a heavy money focus. Usually, they’re drawn to The Simple Dollar because they’re experiencing a financial challenge in their life and they need some down-to-earth advice on how to fix it.
This isn’t surprising. Just shy of 4 out of 5 Americans live paycheck to paycheck. Inevitably, some of those people start feeling nervous about their situation, and others are hit by an unexpected event and suddenly find themselves in a really stressful financial state. Money is the resource that they need to get a grip on in that moment, more than any other.
That’s why, when I do focus on those other areas, I try really hard to make the connections to money as clear as possible. Often, the main reasons I use for those tactics aren’t directly related to money. Usually, I do them because they make some other resource in my life more efficient and then, over time and as needed, that resource saves me money. However, understanding that isn’t really all that helpful to someone seeking immediate financial help. Money is the resource that people are often concerned with, and thus I try to make the connections to money as directly clear as I can.
On the whole, though, The Simple Dollar is really about having a balanced, low stress, financially successful life where you’re achieving the dreams you have for yourself.
What does that really mean, though?
A Philosophical Approach to Life
Sometimes, articles on The Simple Dollar trend in a very philosophical direction, asking questions about what our purpose in life is and what we want out of it. Those questions aren’t easy to answer and they’ve been the core of philosophical works since the dawn of time. You can literally go back to the earliest philosophers and you find that they’re thinking about those questions and philosophers today are still thinking about it.
In my own life, getting a grip on the purpose of my life has been infinitely valuable in terms of figuring out what I should be doing with my money, time, and energy. It was essential in setting meaningful lifelong and long term goals, and those inherently lead what I choose to do with my resources. I use frugality tactics to help me move toward those goals efficiently.
Everyone has a different understanding of their purpose in life. I think that anyone can benefit a whole lot by reading some of the better works on life philosophy out there and figuring out what really clicks with them, because it won’t be the same thing for any two people. I’ve written about stoicism and Epicurean principles and Aristotle’s principles and secular Buddhism and books like “Walden” and Voluntary Simplicity and Self-Reliance (in three parts).
(If you’re interested, my own belief is that the purpose of life is to find out what you’re good at and practice it with enough skill and focus that you lose track of time and space and achieve a “flow state.” This flow state feels tremendously good, produces really high quality results, and can be used in both professional and all manner of personal contexts. I can dig into that idea in a bunch of ways, theologically and psychologically and philosophically, but I basically think that the best life I can lead is one where I regularly get into a flow state and the things I produce while in that state make the world a better place. I think this approach helps greatly with my writing, but also makes me a better parent and a better husband and a better friend and some of the things I do in that state help many, many people. Having said that, however, I think that everyone has a different view of what their own purpose in life is and you should seek your own and not expect it to match mine.)
When I write about such subjects here, I try to center it around things that I’ve learned that resonate with me, but also with ideas that I can at least appreciate that I know resonate really well with others. I want everyone to be able to figure out at least some idea of what their own purpose is, so that they can set more meaningful life goals and put their finances to work in service of it. Not only does this provide a ton of motivation for good financial behavior, it also translates your financial success into something that’s deeply personally meaningful for you.
Final Thoughts
Whenever you read an article on here that delves into time management or into checklists or into meditation or into something philosophical, there are really two key things to remember.
One, frugality is about getting maximum value out of all of life’s resources and those resources are generally transferable to one another. If you’re efficient with time, it’s easy to convert that time savings into money. The same is true with energy, health, relationships, focus, and so on.
Two, having a purpose in life makes it much easier to set long term goals that really resonate, and putting your finances to work in line with those goals makes financial progress much more powerful and meaningful. When you really figure out what you want out of life and start setting goals to maximize your ability to do whatever that is, the financial moves you make in service of that goal seem incredibly joyful and purposeful because you’re building a life that really means something to you.
Those things are big cornerstones of personal finance, in my opinion. Know why you’re doing this. Get maximum value out of all of life’s resources. That’s the path to not just financial success, but success in life.
The post Frugality, Philosophy, and Time Management appeared first on The Simple Dollar.
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Dear Penny: My Family Keeps Asking for Money and It’s Bleeding Me Dry
Dear Stuck,
You could take a second job. You could get a side hustle or five. You could work 100 hours a week or more. Heck, you could work so much that you quit sleeping if you really want to keep bailing out your family.
But I suspect you already know the answer to your question: You can’t keep providing for so many people and keep your savings intact. Your family is using you as a walking checking account. As long as you keep depositing money, they’ll keep making withdrawals.
Right now, you’re not in a position to financially assist family members. Think back to the instructions at the beginning of every flight you’ve ever taken and how they always tell you to put your oxygen mask on first before helping anyone else in an emergency. The reason, of course, is that you can’t help someone else if you pass out because you’re deprived of oxygen.
The same principle applies here: You’re out of savings, so you can’t help anyone, including yourself, in an emergency.
Schedule a time to go over the gamut of your finances with your wife, including how much you’re bringing in, how much you’re spending — both on your own expenses and for family — and your short- and long-term goals.
A goal to prioritize is rebuilding your savings, which is especially important since you have irregular income. Until you have several months’ worth of living expenses saved, I’d strongly suggest you both commit to not forking over cash until you’re on more solid financial footing.
Since your dad has hit you up for cash twice in the past few months, you need to tell him that you’re not in a position to help out. The reasons he needs money don’t matter. Keep the focus on you and how you don’t have the resources to bail anyone out.
The key is to communicate this soon. That means before he’s on the phone begging for money. Be prepared to say no and keep repeating it the next time he asks for help.
Don’t be swayed by any promises to pay you back. You can’t afford to loan money if you can’t afford to make that money a gift.
With your mother, you should have a talk about the financial stress you’re feeling — which there’s a good chance she’s experiencing too as she hunts for a job. Talk to her about if there are ways she could earn extra cash to contribute, whether it be through walking dogs, delivering groceries or babysitting. Even a contribution as small as $50 a week could relieve some of the pressure.
Once you’re in a better financial situation — meaning a healthy amount saved and you’re earning more than you’re spending — you may decide that you’re willing to help out family members in certain circumstances.
If so, setting limits before relatives hit you up will be key. Decide how much you can afford to offer if a family member needs money. Consider opening a separate savings account that’s earmarked for that.
Just know that when someone asks you for money, they’ll often make it sound like an either/or situation, i.e., either you loan me money or I experience the worst-case scenario, whether that means being evicted, having a car repossessed or having an account sent to collections.
But often it’s not. Being cut off from an easy source of cash can be a source of motivation. People find ways to earn extra cash or work out a plan to get caught up on payments. Or at the very least, they find someone else to hit up.
Just focus on how much you can afford to help out — and if you aren’t in a good place financially, that amount is zero.
Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny. Send your questions about money worries to AskPenny@thepennyhoarder.com.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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'My mortgage is a millstone' the exes trapped together in a home-loan nightmare
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I’m from Brazil and have never paid National Insurance. Can I start now?
I am 86 and was born in Brazil but I have lived in the UK since 1999.
I have dual citizenship.
Despite being here 20 years, I have never paid National Insurance, mostly because of ignorance. I have always taken on low-paid jobs, mostly earning around £650 per month.
When I started at one company, they asked for my National Insurance number but then said I was already over the age for paying NI anyway and I didn’t need one.
So here I am, in good health, still working to keep myself active, but with no prospect of having a state pension. Last week I applied for my NI number and I have an interview soon.
If they give me an NI number – despite my age and low earnings – will I be able to backdate and pay for Class 3 NI contributions for the past 10 years, so that I can apply for state pension straight after? And where would I go to calculate these contributions?
Class 3 National Insurance (NI) contributions can be paid by people to fill in gaps in their record to qualify for benefits such as the state pension.
However, there are two issues that mean you won’t to be able to backdate your claim for NI contributions. The first is that you were over state pension age when you came to the UK and you are unable to pay NI contributions for years after state pension age. In addition, you would only be able to backdate a claim for six years and you need to have 10 years to receive any kind of state pension entitlement.
You don’t mention if you are single or married in your letter but if you are single, then given your current earnings, you should be able to claim Pension Credit, which would bring you pretty much up the state pension level anyway. Please note that any savings you have will be taken into account when eligibility for this benefit is being assessed.
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