Figuring Out Where You Are Right Now

Thanks for hanging in there with me on my short absence. My mom is doing better and things have stabilized for now.

This post will be a continuation of the previous post titled How Do I Get a Handle On My Money. In this previous post I talked about what FI means, how to calculate your FI number and then gave you 2 assignments.

  1. Add up all you debt (I mean ALL of it)
  2. Make a list of the 10 things that make you happy

If you haven’t done these 2 things yet, stop here and do them now.

Your “10 Things” List

Were there any surprises on your “10 Things” list? Did you have a hard time making the list to begin with? You may not think you deserve to be happy or that happiness is just not within your reach. I want to tell you that these ideas are false. You can be happy.

I’m using the term happy, but really, this is joy…joy in the Lord. I’ll write about that in a future post. God gives us all we have and His desire is for you to experience joy.

May the God of hope fill you with all joy and peace in believing, so that by the power of the Holy Spirit you may abound in hope.

Romans 15:13

And, the idea that happiness is not within your reach is also false. In the next few months, we will work through all the steps you’ll need to get your finances on track and be able to tackle that “10 Things” list!

So, how about surprises on your list. You might have discovered some interesting things about yourself or your spouse. One concept that may have appeared is, not everything on your list requires money or at least not large amounts of money. You may have discovered you can be content and intentional with life and relationships and sometimes, that doesn’t cost anything!

Your Net Worth

Now, let’s put that debt number to work. We’re going to create a Net Worth Statement. This is a simple statement that lists all your Assets and Liabilities. Assets are what you Own and Liabilities are what you Owe. The difference between the Total Assets and Total Liabilities is Net Worth.

Why do a Net Worth Statement

A Net Worth Statement gives you a snapshot of your financial position. This information is useful in creating a financial plan or understanding more about your financial health. I know many people who don’t know how much they owe on their mortgage, how much they have in savings or even where some of their assets are. Don’t be one of those! Be informed about your finances.

How to Create a Net Worth Statement

A Net Worth Statement is easy to create. This can be done with a blank sheet of paper and a pencil or with a spreadsheet. If you are doing this on paper, simply draw a line down the middle of the page, title one column Assets and the other column Liabilities. List everything you own in the Asset column and everything you owe on the Liability column.

You’ll need to gather information about what you own, such as the value of your house and cars, similar to how you gathered all your debts earlier. I had you start with the debts or what you owe first because those are usually more time consuming and it’s a more emotional exercise.

If you are a spreadsheet person, you can create your statement with a spreadsheet similar to the one below. I have created a sample spreadsheet that will give you an idea of the categories you might need. Even if you are creating this on paper, look at the categories for ideas of the kinds of numbers you’ll need to gather.

There are many Net Worth spreadsheets available online. You can use this one or find another that fits your style better. Remember, one size does not fit all!

Plug in all your numbers or list them on your paper. When you are finished, add up the Asset column and then add up the Liability column. Take the Total Liabilities and subtract them from the Total Assets. (or let the spreadsheet do the math for you).

Is your Net Worth number positive or negative. If positive, this is your Total Net Worth today. If the number is negative, we’ve got some work to do!

This is my Sample Net Worth Statement Spreadsheet. If you would like to use mine, click the link below the picture of the spreadsheet, save a new copy for yourself and you are ready to go.

Assignment and Key Takeaway

Assignment – Gather all your financial data and create you very first Net Worth Statement. If you already have one, make sure it’s up to date.

Takeaway – Be informed about your finances. Don’t depend on someone else to protect and track your money.

Looking Ahead

In Part 3, we will learn how to do a Monthly Budget

Life Happens

This is just a short note to let everyone know I’ve had a family issue come up and it will be some time before I post again.

I am solely responsible for my 98 year old mom. She lives back in Texas and, as you can image, her health is a challenge at times. She’s actually doing great for a 98 year old, but as my nurse friend said, at this point there’s no cushion. That is true for their physical state as well as their mental state.

She is recovering and I hope to be back home in a few days. Right now we are navigating what the “new normal” is. I appreciate your prayers and the support I’ve already felt from my FB family.

I’m sure I’m not the only one here with aging parents. In fact, the blog post I was working on when this happened last week was about our aging family and our own aging. I guess the Lord gave me some new material! These are topics that a lot of us are dealing with and, hopefully, we can all learn from each other.

Thanks for your patience and I’ll be back soon.

God is our refuge and strength, a very present help in trouble. Therefore, we will not fear though the earth gives way, though the mountains be moved into the heart of the sea, though its waters roar and foam, though the mountains tremble at its swelling.

There is a river whose streams make glad the city of God, the holy habitation of the Most High. God is in the midst of her; she will not be moved; God will help her when morning dawns. The nations rage, the kingdoms totter; he utters his voice, the earth melts. The Lord of hosts is with us, the God of Jacob is our fortress.

Come, behold the works of the Lord, how he has brought desolations on the earth. He makes war cease to the end of the earth; he breaks the bow and shatters the spear; he burns the chariots with fire. “Be still, and know that I am God. I will be exalted among the nations, I will be exalted in the earth!” The Lord of hosts is with us, the God of Jacob is our fortress.

Psalm 46

Being on the Same Page With Your Spouse

Have you wondered, “Will my spouse and I ever agree about money?! Can we possibly work together to create the life we want or will we always be at odds?” The bad news is…money issues are the primary reason for divorce in America. Good news…there’s hope.

I can’t stress enough how important it is to be on the same page with your spouse financially. When you’re not, it’s like being in the same boat, but rowing in opposite directions. You’re together, but you spend a lot of energy and go nowhere.

One of the reasons Stephen and I spent so many years drifting in our finances is because We Didn’t Pay Attention. I kept thinking it would somehow magically all work out. What actually happened was, the more difficult our situation got, the more not being united was a problem. We needed to make some hard decisions and we couldn’t agree.

Getting on the same page with your spouse is possible. Not easy, but possible. Stephen and I struggled with not agreeing on spending, saving or even how to do Christmas! There were many reasons for our divergent ideas.

  • Background – Everyone grows up with different money experiences in their childhood.
  • Personality – Are you a natural spender or a natural saver. There are lots of times when a spender is married to a saver. (That’s not all bad, by the way)
  • Gender Differences – Men look at money as a measure of achievement or a “scorecoard”. Women look at money as part of their security system. When it is not stable, fear can set in. (I experience this!)
  • Divergent Goals – Each partner may have a different idea of what’s important to them.
  • Lack of Goals – You may not have even thought about goals or what you’d like your future to look like.

All of these issues can be overcome.

Money Represents Your Values

Your money and the way you handle it represents your family’s value system. You may not have thought much about that, but now is a great time to start.

For where your treasure is, there will your heart be also.

Matthew 6:21

Dream With Your Spouse

Get a cup of coffee, sit on the deck or take a walk in the park and have a conversation. Just dream. Talk about your dreams and your desires for your future. What do YOU want it to look like? What does YOUR SPOUSE want it to look like? Share your desires for your future with each other. Write them down to reference later. If you made your List of 10 Things That Make Me Happy from the previous post Personal Finance Basics Part 1 – How Do I Get a Handle On My Money?!?, now is a good time to pull that out.

While you’re having this conversation, REALLY LISTEN to your spouse. What do you hear from them that maybe you weren’t aware of? What pain might you be hearing from their childhood? Many of the items I shared above may surface during this conversation. The differences in your upbringing, differences is personality or goals. Have grace and patience with each other. Remember, the end-game is to walk into your future together, hand-in-hand.

I entreat you to walk in a manner worthy of the calling with which you have been called, with all humility and gentleness, with patience, showing forbearance to one another in love, being diligent to preserve the unity of the Spirit in the bond of peace.

Ephesians 4:1-3

Budgeting With Your Spouse

Working on the budget is where the rubber meets the road. If you don’t have a budget yet, you’ll need to start working on one. (If you don’t know where to start with a budget, I’ll be talking about that in a future post) If you have one prepared or you’ve been using a budget for a while, it may be time to revisit and revise.

Usually one partner is a money person or a spreadsheet nerd. Most times the other is not. The one with the talent and penchant for spreadsheets can prepare the preliminary budget, but BOTH partners need to make the final decisions. This will require some give and take. Some negotiation over categories and amounts, but in the end you should be able to determine a budget that reflects your goals and your values.

The flow of money in a household represents the value system under which that household operates.

The Board Meeting

One way Stephen and I softened the harshness of talking money was to schedule “Board Meetings”. Arrange a time and place where you can be away from the kids and other distractions to talk money. We would often have our Board Meetings at our favorite “hole in the wall” Mexican food restaurant. If spending money for this is not in the budget, go to the park or someplace that is meaningful to you.

Being outside of your normal surroundings and away from distractions and things that remind you of stress can sometimes make these conversations easier. Have these Board Meetings as often as you need. Later on, they will become a habit you look forward to.

Side Note: We found this was also a good way to have a “calendar meeting”. Coordinating schedules can also eliminate stress on your emotions and your budget. If you know that 3 nights next week you will be at school functions or games, you can plan ahead for meals and not “run through the drive-through”.

Final Thought

Getting a reluctant spouse on board may be difficult, but it is crucial to your success. Show them why you want to implement changes. Show them how much better your future can be if you don’t just follow the norm.

ChooseFI Ep. 152 Listeners Welcome!

Today is November 6, 2019. My interview with Brad and Jonathan on the ChooseFI Episode 152 aired 2 days ago. My desire for this interview and, really every time I tell my story, is to help others in the same situation and give people hope. I have been overwhelmed and humbled by the reaction to my story!

I want to tell everyone who listened or watched, commented and subscribed to my blog WELCOME and THANK YOU!

My goal for this website is to provide a safe place to discuss our financial difficulties or hang-ups. After all, there aren’t many people in our lives we can talk to about money, right?

I also want to give folks a place to talk about what the Bible says about money. God has called us to be good stewards of our resources. This includes, but is not limited to our money. If we steward or manage our resources well, we are in a position to help others. Being generous brings a joy to our lives like nothing else will. We don’t give just to receive back, but I can tell you the giver is always blessed!

I’m going to start my posts with financial basics for anyone who is just starting to get a handle on their money. It will be finance 101 type info. Then I will be exploring other topics like our attitude about money and generosity. I also hope to discuss interesting life hacks, like travel rewards and frugal lifestyles.

I also have a Facebook page, Started At 50. Feel free to leave a comment or start a conversation there.

One again, THANKS and feel free to leave comment or start a conversation anytime. I’m excited about all of us doing this “FI Journey” together!

Till next time…

How Do I Get a Handle On My Money

Are you frustrated about your money?  Are you embarrassed that you don’t know how to get a grip on your spending?  Are you totally frustrated with not knowing how to invest? 

You’re not alone.  Most Americans live paycheck-to-paycheck.  If you’d like to break that cycle, you’re in the right place.  I’ve lived at least some of what you’re going through and there’s hope!  If you haven’t read my story, you can read it at Our Story.  We’re going to step through this together.  Ready to get started?

Financial Independence

 I want to start by giving you a picture of where we’re headed.  A vision of what your life can look like when you have your money under control.  I want to tell you about Financial Independence or FI.  Fi means different things to different people, but the technical definition is – When your passive income from sources other than your W2 job can cover your expenses, you are Financially Independent. 

Huh, what does that mean?  What’s passive income?  This is income from a source that does not require you to do work.  This means you’re not trading your time for money like you do at your W2 job.  These sources fall into 3 categories.

  1. Dividends or Interest from investments like stocks or your 401k or IRA
  2. Income from a side job like an online store or a side business you own
  3. Rental Real Estate.

These are things that make you money even while you sleep.  Some folks have become Financially Independent with investments only or rental real estate only and some have a combination of all 3.  It’s your choice. 

How Much Do I Need?

So how much money do you need to become FI?  That’s up to you. The easy way to calculate this is to look at how much money it takes for you to live now.  We’re going to talk through how to come up with that number in a future post.  When you know how much you spend in a year, then that number is plugged into a formula.  This formula is generally called the 4% Rule of Thumb.  Don’t worry, it’s easy.

The 4% Rule (of Thumb)

The 4% Rule, for short, says that you can withdraw 4% of your investments each year and still maintain your principal over time. 

Total Investments x 4% = Annual Income

Another way to calculate it would be:

Desired Annual Income x 25 = Total Investment needed

For example, if you need $40,000/year to cover your expenses in retirement, you will need $1,000,000 in investments.

Woah!  That’s a big chunk of change!

It might sound like a huge amount right now, but I can tell you that with the right tools AND the right mindset, this is totally possible.

Where Do We Begin?

The best place to begin is by evaluating where you are.  Do you know how much debt you have?  I mean Total Debt.  You may have never added up your total debt.  It may be too scary.  You may feel like you’ll be judged by your spouse, friends or family. 

It may not by pleasant, but this is where we need to start.  Pull out everything you owe and add it up.  This will include:

  • car loans
  • student loans
  • mortgage (if you have one)
  • credit cards  
  • loans on toys like boats, 4-wheelers or jet skis

Hold on to your total debt number and we will use in the exercise in Part 2 – Your Net Worth Statement.

Assignment and Key Takeaway

Assignment 1 – Calculate your Total Debt.

Assignment 2 – Make a list of “10 Things That Make Me Happy”. Take some time to think about this. If you could plan your “perfect day”, what would it include? Who would you spend it with? What would you do? Cook a gourmet meal, go on a hike, take a road trip, eat chocolate? It can be anything. Think about what lights you up.

Key Takeaway – Don’t be afraid to take a good look at your debt. The first step in gaining control of your money is to access where you are right now.

Looking Ahead

In Part 2, we’ll look at How to calculate your Net Worth. Until then, Assignments 1 and 2 are your homework. See you next time!

God is our refuge and strength, a very present help in trouble.

Psalm 46:1

OUR STORY – THE GOOD, THE BAD AND THE …HOW DID WE GET HERE?!

First of all, thanks for stopping by and checking us out!  Second, let me tell you a bit about who we are and why I’m blogging.  My name is Becky and my husband is Stephen.  We are originally from Texas, and when Stephen retired in 2018 we moved to the mountains of Colorado.  We moved from sea level with heat and humidity to 8500 feet of cold and dry. 

Becky’s Background

I grew up in a 2-working parent home.  My mom was a school teacher and my dad was a blue collar worker.  We had what we needed, but not a lot of extras.  Mom was the main provider and decision maker.  Dad was impulsive and had grown up in a family with an entitlement attitude.  Unfortunately, that got passed down.  I was an adult before I realized the attitude I had about my employer and co-workers was skewed.  I grew up in a Christian home, but faith and money were not discussed.  We either had the money for something I might want or we didn’t.  There was no education on how to handle money.

College and Early Career

Stephen and I met in college and married after graduation.  We both secured good jobs earning more than our parents!  We thought we were all that!  Little did we know, that disaster was coming.  One of the first things we did in our newly married life was buy a new car and a house.  That’s what you did, right?  This was the late 70’s when oil was booming and things were only going up.  The advice we received was not only buy a house but get as much as you could afford.  So we did.  Six months into our new marriage and we were homeowners.  At a 13.25% interest rate!  If you lived through the 80’s, you know it got even worse. 

We were making our payments fine, but not much of it was going to principle. Someone even told us about making extra principal payments to shorten the 30 year mortgage and save a lot of interest, but we didn’t listen.  We were too busy spending everything we made.  After all, we were in a position to have fun and have some material things for the first time in our life.  This even included a sailboat and yacht club membership.  Life was good.

What wasn’t good was our lack of a relationship with the Lord or any vision for saving for the future.  We knew we really needed to think about those things, but they were not a priority.  “We’ll do that another day.”  Our lives seemed to be on autopilot.  Problem is, autopilot looks a lot like just drifting through each week, month and eventually year.

How Can We Possibly Save Anything Now!

When our first child arrived, we decided I would stay home with our son.  This was a big decision because my salary was a little over 50% of our income (we had never heard of the “Save one salary and live on the other” idea).                          

A few years later, Stephen’s company transferred us from Houston to Boston.  Our hope was for a large increase in salary that wouldn’t be walked back when we returned to Texas.  This was not to be.  Our home in Texas was rented at a loss and his salary didn’t keep up with the increased cost of living.  The final insult happened when we returned to Texas.  Soon after moving back, his company started downsizing and he was laid off.  So much for the salary bump!  There were several job changes after that, but never one that really helped our financial situation.

God Enters Stephens Life

During the mid 80’s, God did a miracle in our lives and marriage.  Stephen and all 3 children came to know Christ.  Stephen’s new life in the Lord caused him to look at life differently and a day came when he decided that the ethics of his coworkers did not match what he was striving for.  He decided that something had to change and he started his own business and worked from home. 

There were good years and some not so good.  But like the old MasterCard commercial, having Dad at home was “priceless”.  He attended every school sporting event or concert.  We were blessed by him being at home and in control of his schedule. 

Now, back to the financial part of this story.  Remember, we had not saved anything for the future.  That means no retirement OR college savings.  While Stephen owned his own business, there again was not enough income to start any saving.  Or so we thought.  Oh, how I wish someone had showed us the power of compounding interest!

Falling Off the Financial Cliff

In the same year, two of Stephen’s clients decided not to pay him.  I know this happens in business, but we had not experienced it. The amount was equal to about a year’s salary.  This sent our finances and our relationship into a death spiral.  Not only did we not have any income, but other companies that Stephen had contracted still needed to be paid. 

Our financial situation deteriorated to the point that it was affecting our marriage and family life.  I was frightened and Stephen felt like a failure.  We set ourselves up for hardship because of our failure to even have an emergency fund.   All our poor choices and indifference to the future had landed us in the middle of this storm and we were paralyzed.  We had what felt like a mountain of debt, we were buying groceries with a credit card and we were about to start the college phase of life with 3 kids.  I honestly felt like we could pay on our debt for the rest of our lives and not pay it all off.  This is when Satan steps in and gives you a big dose of Hopelessness. 

This time in our family was basically awful.  No hope and, as the old saying goes, the light at the end of the tunnel felt like an oncoming train.  But, God’s grace is new every morning!  He didn’t leave us in our mess even though we really deserved it.

Enter God’s Comfort and Hope

With the recommendation of a friend, Stephen was connected with a small business owner that had a position to fill.  He was hired and we were finally in a place of stability with a steady paycheck.  He worked in this position for 2 years and, in that time, paid off his old business debt.  We had room to breathe!  After those 2 years, Stephen took another position at a firm he had admired for many years.  We felt like God had held this position just for him.  It was perfect and he fit right in.  The salary was good and the bonuses were even better. 

Stephen started this position is 2008.  Our oldest son was in college on a full ride scholarship.  Our second son would be starting college soon and had a ¾ scholarship.  We were in a much better position than before, but still didn’t know how to handle our finances well.  We just knew we didn’t EVER want to go back to where we’d been.

Ramsey Days

A friend mentioned some tapes they had from someone named Dave Ramsey.  (Yes, I said tapes, as in cassette tapes!)  I listened to a few and after discussing what I heard with Stephen, we decided “What can it hurt?”  It didn’t take long before we realized we needed a change in our thinking and our attitude. 

We saw how Big changes could be made if you worked at it and we wanted more.  We were hooked on Ramsey’s simple, bible-based approach to finances.  After all, God has given us all we have and we had not been good stewards.  Now we were ready to change that for good.  A desire for helping others out of their mess and hopelessness became a passion of ours. Stephen and I became Dave Ramsey leaders.  It was very rewarding to see others make positive changes that can last a lifetime.

The Big Shovel

The next few years consisted of paying for college and saving everything we could, which still wasn’t much, but we had a different attitude about our spending.  When the youngest was done with college, we were able to really make a difference with our savings.  Stephen’s salary and bonuses gave us a HUGE shovel to use for retirement savings.  It felt so good!  And, we had 3 adult children with 4 degrees between them and Not One of them had any college debt.  Funny thing about making better decisions.  God can bless them.  It was like He was waiting for us to grow up, act like adults and then He truly poured blessings on us. 

Finding Choose FI

After we got to a place of stability, we thought our lives could somewhat go back on autopilot.  Not only that, but we could loosen the purse strings a bit and enjoy some of the income we had.  At that point, we assumed retirement would come at “normal” retirement age of 66 or 67.  In May of 2017, our oldest son introduced us to the ChooseFI podcast.  (We had not entered the podcast world yet!)  We listened to a few selected episodes and were quickly hooked.  The information covered in ChooseFI, along with other podcasts and blogs, took what we knew and put it into warp drive!  We learned about travel rewards, tax optimization, being even more frugal and many other topics.  After re-evaluating our position and checking out some of the speadsheets found on blogs like Big ERN and Retirement Manifesto, we decided to keep our spending low.  That allowed us to shave off 3 years and retire at 63.  Not early, but early for us!

Life Lessons

Our whole family had survived the bad years and come out the other side in good shape.   A little charred from the experience, but in good shape.  In fact, I thought many times that I never want to go back to where we were, but we learned lessons we wouldn’t have otherwise.  I don’t think we would be in the great place we are now if we hadn’t walked through that pain.  We probably would have continued to drift through life thinking normal is good enough.  Unfortunately, normal is in debt and living paycheck to paycheck.  Also, many people assume that normal can’t be changed, but it can totally be changed with a shift in your thinking.  We have had our eyes opened.  Opened to better attitudes and more efficient ways of handling money and life. 

I will go more in depth with those changes in future posts.  Right now, I want you to know one thing.  If you’re young and don’t know where to start, there is a way to get your money under control and make BIG changes for your future self!  If you’re not quite so young, it’s not too late.  Let me say that one again.  IT’S NOT TOO LATE!  BUT, you need to start NOW.  In either case, forgive yourself and let’s begin to make positive changes for your future.

Now to Him who is able to do exceeding abundantly beyond all that we ask or think according to the power that works within us, to Him be the glory in the church and in Christ Jesus to all generations forever and ever.

Ephesians 3:20-21

Welcome to Started at 50!

First of all, thanks for stopping by and checking us out!  Second, let me tell you a bit about who we are and why I’m starting this blog.  My name is Becky and my husband is Stephen.  We are originally from Texas, and when Stephen retired in 2018 we moved to the mountains of Colorado.  We moved from sea level with heat, humidity and mosquitos to 8500 feet. It’s cold, dry and beautiful!

Now, the reason for the blog.  Stephen and I spent a big chunk of our adult life making poor choices.  Choices about relationships, parenting and money.  The short version of the story (read the whole story here) is that we started living out our faith and our relationship with Jesus Christ in our 40’s, and as a result, started making better choices in our marriage and parenting. 

Believe me, it was baby steps at first, but we gradually made progress.  Then at about 50 years old, we started making better choices with our money.  It was at that point that God really blessed our family.  Not only financially, but in other areas, too.  It was like He was waiting for us to grow up and be ready for His blessings. 

We are not trained or skilled at financial matters other than our own experiences and being students of “The School of Hard Knocks.” LOL.  What we do have is a passion for helping others who are struggling because of a lack of knowledge (You don’t know what you don’t know!), or those who, like us, didn’t start as early as they should have and now feel lost and/or hopeless.  Our hope with this blog is to share the basics of good, sound financial information in the framework of our faith and dependence on our Heavenly Father.  We are by no means the only place to find financial info, but we hope to create a place of peace and hope in a culture bent on keeping up with the Joneses and instant gratification.  We want to offer hope to young adults that don’t know how to start with their finances and to a more mature generation that is afraid “It’s too late!”

As a little dash of spice, we will throw in some of our experiences in learning how to be retired and learning how to live in the mountains.  It’s beautiful, but does anyone have any oxygen?!

He has told you, O man, what is good; and what does the Lord require of you but to do justice, to love kindness, and to walk humbly with your God.  Micah 6:8