9 Thoughts on Financial planning in the time of COVID

9 Thoughts on Financial planning in the time of COVID

by | Jun 22, 2020 | Journal

1. Having cash will make you feel better. Being able to see that pile of cash in terms of how many months it will keep you afloat will make you able to plan better.

2. Don’t beat yourself up for not having skills on Day One of the pandemic that you didn’t have the day before the pandemic. Financial technique doesn’t all of a sudden appear just because you need it. Be gentle with yourself and start figuring it out.

3. Lots of people are going to use debt to get through this. That’s okay. Don’t add shame to the shit you’re carrying around. However, instead of pulling on credit in a wild out-of-control way, do it deliberately. Only take what you need for that month and try to stick to it.

4. Austerity budgets are really hard the longer you stick to them. Remember to keep looking at your numbers and being as honest as possible about what you need. Lying to yourself doesn’t help.

5. At some point there might be the need to shift from ‘how do I keep afloat’ to making some major changes. I don’t know what that looks like in your life, but for some of us (especially those linked to the arts world) things might not ever be the same.

6. In times where making a decision seems impossible, sometimes the only answer is to wait for more information. Understanding how long you can afford to be patient will help give you the permission to wait.

7. When you take stock of what you have don’t just stop at pure financial resources. A good relationship with your landlord is a good an asset as anything these days. Write everything down and remember that you are not unequipped for this fight.

8. Your plans will be wrong. They were always going to be anyways, but they definitely will be now. Planning is about stretching out your perception so you can figure out where to place your next step. Plan, but then re-plan when more information comes up.

9. We will not all be okay. If you are, that’s great. Some people are not. People will lose their houses and their businesses. People will suffer, and some are already. Be as kind as you can be, be as gentle as you can be… with yourself and with those around you.

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2 Ways for Visual Learners to Draw Up their 2020 Plan

2 Ways for Visual Learners to Draw Up their 2020 Plan

by | Feb 10, 2020 | Getting Started with your Money, Uncategorized

I’m a pretty visual person, so as much as I like scrawling a list onto a yellow legal pad there’s something about seeing things actually drawn out that can make them much clearer in my mind.

Now, let me get something straight… I’m not a good drawer. I am an enthusiastic drawer… but not a good one. But luckily that’s not a prerequisite for either of these exercises.

The goal is to get pen to paper and think through the next 12-month period of your life.

Exercise 1: Design your Year (or your next 5)

This exercise I stole from the wonderful book "Designing Your Life" by Bill Burnett and Dave Evans. They run a course at Stanford, which applies design principles to your life.

Their exercise encourages you to draw a version of the next 5 years. In fact, it encourages you to draw 3 VERSIONS of the next 5 years. One on your current track, one on a completely different track, and one on a track that might seem completely ridiculous to you right now (but you would secretly entertain if I promised no one would laugh at you).

I loved this exercise, and I’ve adapted it with my financial lens.

For those of you that want a better sense of the upcoming year and what it will throw at you financially, you can draw out the next 12 months using their method, sketching in major events, things you hope to do and even adding a few notes about potential costs, slow periods of work, and/or things you need to save for.

For those of you looking for ideas and more specific direction, you can sketch a few different versions of your year (or even do a 5 year sketch). Draw out a version on your current trajectory, and then sketch something wild that interests you… it’s only drawing after all… the stakes are pretty low.

Exercise 2: Colour Blocking out Your Work/Life Balance

This exercise is lovingly stolen from a mentor of mine that I work with at Spring Financial Plans. She recommends that instead of starting off the year by filling your calendar with work commitments and goals, to instead start out by blocking off your 'vacation' time (whatever that means to you).

This simple image really helped me see the shape of my year: when I planned to take some time off, when I needed to take time off to get over my jet lag, and when there were long periods with no time off (which I know from experience probably isn’t a good idea).

It also gives me the permission that I so dearly need to take time away from work because it's baked into the plan right from the beginning.

There’s something about seeing it laid out in in one block with different colours that really helps me connect to it in a different way.

This is done using Google Sheets, but there’s no reason you can’t grab a few markers and do something similar on your calendar or favourite planner. Whatever is most comfortable for you.

Emily Nixon

Emily Nixon

Rags to Reasonable Community Outreach Coordinator

Emily Nixon is an actor/writer/director/filmmaking Swiss Army Knife. She is also a big money nerd and Community Outreach Coordinator for Rags to Reasonable.

She came to this work after becoming completely fed up with living paycheque-to-paycheque and being too afraid to look in her chequing account. She is passionate about empowering other artists and variable income earners to keep doing what they love and feel confident about their finances.

Email Emily at emily@ragstoreasonable.com

Want to start getting control of your money? How can I help?

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Three Couples Talking About How They Manage Their Money

Three Couples Talking About How They Manage Their Money

by | Jul 8, 2019 | Relationships

One thing that I’ve learned talking to lots of couples about money is that there isn’t one right way to manage your household finances.

Some people like things to be all together in one big pot, some have only a vague sense of what’s in the other persons bank account.

The one thing that the ones who are happy with their joint financial lives have in common is they talk about money a lot. It’s not a taboo topic of conversation, and it’s part of the regular discourse in the house.

This week I wanted to share with you three different couples taking about how they manage their money. These recordings are from the podcast Because Money which I host with a couple of friends.

We’re not a terrible diverse bunch. We’re all straight and white and half of every couple is a financial planner… but even in this sliver of the population there are lots of different ideas.

Mimi & Chris

We’ll start with this episode of my wife and I talking about how we manage our money. Things have changed a bit (they always do), but we definitely didn’t have joint finances. What we did have was a joint idea of what we were trying to do… and lots of conversation.

  • 3:15 – the long (and stupidly complicated story) of why Mimi pays more rent than Chris
  • 9:38 – Managing money with a partner who makes a bunch more money than you do
  • 14:24 – Why it bothers Chris to not be able contribute as much as Mimi…
  • 16:31 – Digging into how we grew up financially…
  • 20:02- How dating Chris helped Mimi become a better saver
  • 26:13 – Do we give each other advice?
  • 29:07 – Planning for career transition and what’s ‘retirement’ for a couple of opera singers?
  • 35:20 – The stuff that we don’t have to talk about
  • 37:09 – We talk about whether we’ll even change the system

Sandi & Seth

Next up is one of my co-hosts (and dear friends) Sandi and Seth talk about money a lot, and it’s interesting to hear about how they manage that. Of course Sandi lives in the world of personal finance and they spend a lot of time together, so we have to grade that one on a curve.

And just to underscore how much there is no single right answer, we’ll hear how their money systems have changed over the years to suit their lives (like having kids) and as technology evolves (like YNAB).

  • 7:23 – How do you guys do money?
  • 10:57 – Who does what in the Sandi/Seth money system?
  • 16:09 – How often do you talk about money?
  • 18:01 – How do you talk about buying big stuff?
  • 24:57 – How do you talk about longterm financial planning?
  • 28:35 – When do you want to retire? If ever?
  • 30:29 – How do you guys invest?
  • 32:37 – How do you guys talk about money with your kids?
  • 40:35 – The Seth and Sandi dream vacation

Owen & Susan

Owen is another advice only financial planner and he graciously agreed to sit down with us to talk about he and his wife manage their cash.They’ve got young kids and have their money communication strategy down cold. It’s a beautiful thing to see.

You can find more about Owen’s financial planning startup PlanEasy here

 

  • 5:30 – Owen and Sue’s amazing, incredible, all powerful money meeting
  • 12:10 – What changed when they had kids?
  • 15:15 – Why Sue budgets in a Word Doc (and Owen DOES NOT)
  • 25:03 – What would Owen and Sue do with a surprise $3,000?
  • 26:10 – How do they figure out what’s ‘fairsies’?
  • 32:50 – What’s the advice you would give to other couples managing their money
Emily Nixon

Emily Nixon

Rags to Reasonable Community Outreach Coordinator

Emily Nixon is an actor/writer/director/filmmaking Swiss Army Knife. She is also a big money nerd and Community Outreach Coordinator for Rags to Reasonable.

She came to this work after becoming completely fed up with living paycheque-to-paycheque and being too afraid to look in her chequing account. She is passionate about empowering other artists and variable income earners to keep doing what they love and feel confident about their finances.

Email Emily at emily@ragstoreasonable.com

Want to start getting control of your money? How can I help?

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How to Build an Account Structure for Self-Employed Creatives

How to Build an Account Structure for Self-Employed Creatives

by | Jun 17, 2019 | Uncategorized

If your self-employed (and even if you aren’t) here are some accounts you should think about having

A tax account:

If you make self-employed income you should have a savings account for your taxes. If you can’t afford to put away a lot, put a $1 in every time you make income, but have a space for it. Once money starts rolling in you’ll be grateful you’ve build this into your structure

A business spending account:

Having a separate place to spend from for your business makes things easier. If it’s a chequing account you’ll have your own business debit card that you can use for expenses in the moment. You’ll also be able to better tell what money is specifically for your business (without stealing it from your rent).

A personal fixed expenses account:

A great way to think about sorting expenses into different accounts is ‘like things go together’. Why putting all your fixed expenses in one account works is because it’s a number that doesn’t change from month to month. You know that if you put $3,000 in that account, then all your bills will be paid. You also know that if you only have $2,000 there on the 1st… that you need to find some more money. Keeping it separate also helps the stress of accidentally spending money that’s earmarked for a fixed bill.

A personal spending account

The perfect pair to your fixed expenses account is a separate spending account. You can use this for all your other monthly spending (food, transportation, movies, Pokéman cards). If you’re using a debit card for all that spending you’ll be able to easily check in to see how much money you have for the rest of the month. It will help you answer questions like “can we afford to go for dinner tonight?”

A series of savings accounts for annual expenses

Everything that isn’t a fixed monthly expenses or a general monthly expense can have a separate savings account. Yup… you can have that many savings accounts. Name them after the thing you’re savings for. Call them ‘Christmas $50” or ‘ Health $100” and then put that amount in them every month (or as often as you can). Even if you can’t fully fund them every month you’ll be able to easily see how much you have set aside for that purpose. It will help you answer questions like “how much can I spend on Christmas this year” or “Can I afford to go on a vacation”.

Download a blank version of this worksheet here

 

How much should I put in these accounts?

That depends on your own numbers. You can go through some old exercises of ours to get an idea or you can just pick some numbers and experiment (not for fixed… that will have to be the same).

Try putting $200 in your spending account and see how long it lasts.

Experiment and see what works and what doesn’t, and then adjust and add accounts where you need.

Which banks should I be using for this?

Again, no right answer… but I am aware that using bank accounts like this can really up your fees.

Go back to the work we did last week and see how much your accounts are costing right now, are there ways that you can reduce those monthly fees? Do savings accounts cost a lot at your bank?

One option is always to use an online bank such as Tangerine, PC Financial or EQ bank. But make sure to check with them as they sometimes have limits on the number of accounts you can use or perhaps won’t have the spending choices you want.

Always go back to what tools you need to spend and save… and then compare the costs of getting that in order to see what’s worth it to you.

Emily Nixon

Emily Nixon

Rags to Reasonable Community Outreach Coordinator

Emily Nixon is an actor/writer/director/filmmaking Swiss Army Knife. She is also a big money nerd and Community Outreach Coordinator for Rags to Reasonable.

She came to this work after becoming completely fed up with living paycheque-to-paycheque and being too afraid to look in her chequing account. She is passionate about empowering other artists and variable income earners to keep doing what they love and feel confident about their finances.

Email Emily at emily@ragstoreasonable.com

Want to start getting control of your money? How can I help?

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What Do You Use To Do Money?

What Do You Use To Do Money?

by | Jun 10, 2019 | Getting Started with your Money

When it comes to our basic money tools, most of us haven’t looked at them since we picked them. The majority of the people I talk to don’t really know what kind of bank account they have or what it costs.

There’s nothing wrong with that at all, but it means that lots of us aren’t really sure if we’re using the right tools.

Defining the ‘right’ tools

There is no ‘best’ bank account, and I don’t think you’re a terrible money person if you have fees on your account.

The purpose of this exercise isn’t to change everything about what you’re doing. It’s about taking the opportunity to look at your tools, see what they’re good at and what they cost … and decide if they’re helping you use your money the way you want to.

That’s it.

You get to make the rules. You get to decide if that fee is worth it to you or not. But in order to do that… you have to take a little gander at what you’re doing right now.

Looking at some basic tools

  • Chequing accounts - great to use for money you need to spend right now
  • Savings accounts - really good for money that you don’t need right now, but will need in the next 1 - 5 years.
  • Business accounts - good for people who want to do business in a name that isn’t their name or have multiple people access the account
  • Investment accounts - these are good for money that you want to spend in the future (a good rule of thumb is at least 10 years from now)
  • Budget apps - good when you want to know exactly where your money is going
  • Spreadsheet - good for people who want to write out all their information in a place that automatically does the math for them
  • Envelopes - great for folks who don’t like technology and mainly use cash

I like to look through these for my clients and ask a few questions.

  1. What do you use this account for?
  2. What does it cost?
  3. What perks does it have?

You can find most of this with a quick google search. Take a glance and note down the things that apply to your life (no need to memorize everything, just find the perks and fees that apply).

It can also be interesting to take a quick gander at your statements and see if you regularly pick up any extra fees like overdraft fees, or extra e-transfer or transaction fees.

For credit cards, take a few moments to pinpoint that annual fee (if you have one) and figure out which month it comes out. Those can always be a surprise when they hit the balance. Also take note of your interest rate and how much your minimum payment is (if you have a balance).

Why should I spend my precious time doing this…?

I get it. This kind of basic tools audit is no ones idea of fun, but it’s information that so many of my clients really find interesting … and it’s pretty easy to do it on your own.

I sketched this out in 15 minutes.

It might help you find something that you’re paying for that you really don’t need, or plan for an annual fee that you forgot was coming.

Mainly it gives you the basic building blocks that will help you answer the question - does the way that I use money work for my life? Is it making things simple and clear…. or are there some things that are jumbled.

If you’re interested in sketching it out like I did, here’s a BLANK VERSION of that worksheet.

Emily Nixon

Emily Nixon

Rags to Reasonable Community Outreach Coordinator

Emily Nixon is an actor/writer/director/filmmaking Swiss Army Knife. She is also a big money nerd and Community Outreach Coordinator for Rags to Reasonable.

She came to this work after becoming completely fed up with living paycheque-to-paycheque and being too afraid to look in her chequing account. She is passionate about empowering other artists and variable income earners to keep doing what they love and feel confident about their finances.

Email Emily at emily@ragstoreasonable.com

Want to start getting control of your money? How can I help?

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