The Cost of Stability & The Hidden Life of Trees

The Cost of Stability & The Hidden Life of Trees

by | Jun 3, 2019 | Getting Started with your Money, Money Meditations

I’ve been reading a lovely book The Hidden Life of Trees by Peter Wohlleben. Apart from being a fascinating and romantic look at how forests work, there are sooo many amazing financial metaphors.

… now… you know I love a metaphor… I LOVE IT SO MUCH… and as I was reading today there was one that I had to share.

It has to do with what happens when a young tree loses the support of “a mighty mother tree”. These giants offer support in a hundred different ways including sending nutrients to the smaller trees as well as literal physical support.

When they fall, the younger trees are left to manage for themselves and learn how to be stable on their own.

“The process of learning stability is triggered by painful micro-tears that occur when the trees bend way over in the wind, first in one direction and then in the other. Wherever it hurts, that’s where the tree must strengthen its support structure. This takes a whole lot of energy, which is then unavailable for growing upward.”

GAH! METAPHOR!!

Learning stability often starts with pain:

I have the incredible privilege of growing up with the support of a ‘mighty mother tree’. My family helped me not worry about money for the first 20 years of my life.

My process of learning how to be stable started as I moved out on my own. And it included a whole lot of painful mistakes.

I named a lot of that pain failure. I beat myself up a lot for how I ‘really should know these things’.

But now I feel differently.

So many of the people that I work with are craving stability. They are at all stages of their lives and careers, but most of them are feeling the pain.

But that pain isn’t failure. It’s a message of what needs to be strengthened. The reframing of that is a powerful message for me, since instead of something to ignore and be ashamed of, it’s something to notice and bring into the light.

“The thickness and stability of a trunk, therefore, build up as the tree responds to a series of aches and pains.”

Cool right?

Increasing Stability Often Halts Upward Growth (for a little while)

Stability is the first step towards growth, but it doesn’t always feel like growth in the moment… in fact it can feel like you’re standing still.

For the tree it means deepening roots and increasing the “thickness and stability of the trunk”. For us it means restructuring resources, building a cash flow buffer (getting one month ahead) and taking care of the annual expenses that can cause debt.

Spending 6 months building a one month cash buffer instead of making big payments on your debt can feel super frustrating, but it’s creating the stability that will make paying off your debt for the last time so much more possible.

We only have so many resources, and investing in stability usually means that there’s less for our other big goals. From the outside it can seem like we’re not making any progress at all, but it’s the progress that needs to happen if we want to… *sigh*... grow up into strong and tall trees.

… sorry for that last one

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

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I Felt Like I Had Screwed Up My Financial Life Entirely… That I Was Destined to Constantly be Broke and Insecure.

I Felt Like I Had Screwed Up My Financial Life Entirely… That I Was Destined to Constantly be Broke and Insecure.

by | Apr 22, 2019 | Artist 2 Artist

*This was written by a client of mine (Chris) to help you understand a little more about what working with a financial coach/planner is like and so you can better decide if it's something that interests you. 

I think until the time I started working with Chris, I was just nervous and ashamed about money in every way, and had an extremely hard time talking about it to anyone. I felt like I could never get it right with money; I never had enough of it, I was always behind my bills in some way, and I could never trust myself with it. I felt like I had screwed up my financial life entirely, that I was destined to constantly be broke and insecure.

To be fair to myself, I had never been taught how to handle it;

 I think my parents, who were both first generation college grads and came from working class backgrounds, felt like they were giving me a gift when they didn’t teach me how it worked. Because I didn’t grow up “on the farm” (literally), they thought I wouldn’t have the same problems they did, so I didn’t need to know the basics. Unfortunately, the opposite happened. I never got the financial education that they did. When I got out into the real world, I had nothing to fall back on, and I had to work it out on my own.

For a long time I was ok—I was making enough to get by without too much planning, but I was miserable in my day job. I started to take my art seriously by going back to school for my MFA, and everything changed. My income decreased as my quality of life increased. I was doing what I wanted to do with my life, but I couldn’t just pay for things that came up out of the cash in my checking account.

Simultaneously, I was getting older, and I started seeing the writing on the wall: Shape up or…else. Big questions started looming. I can’t wait tables/dogsit/babysit/be your assistant forever! I now know my body will give out at some point J. I felt like I was a teenager trapped in a middle-aged person’s body. Odd jobs were not cutting it. When they did, I didn’t know how to make them fit together to pay everything on time.

I had found a lot of relief from other kinds of therapy, so I thought there must be some sort of financial therapy that might be useful in the same way. That was how I found Chris.

What was surprising to me was how quickly after we started working together, I became in control of my finances.

 Once I took a look at what I really needed and what my options were, I was able to find a path forward. But freedom didn’t look like what I thought it would; it’s not like I magically made more money. But I was able to set up a system that worked without me having to freak out every minute. Making rent was so stressful to me before Chris; now, I know that the money is there. I don’t have to fake it, I don’t have to stress out on the 20th of the month, wondering how I will get it together before the 1st. I know what is happening, and I don’t actually even have to try that hard.

It has literally been the difference between me being able to do my work and not. Instead of letting my brain be occupied by endless small worries about money, I now know that my basic needs will be met. All I have to do is…make the art I’ve been trying to do my whole life. Without worrying about how I will pay rent next month. Truly, it’s amazing.

I’ve already recommended Chris to people I know, because so many artist friends of mine are in the same bind. We have dedicated our lives to making something meaningful out of our time on this earth. But making something meaningful both requires our undivided attention and a day job. How can those things that are opposites find a way to speak to each other? We don’t want to have to worry about money, but it is the not worrying about money that makes us unable to work.

Simultaneously, money is this thing we can’t talk about, it is the shame we all carry.

I’ve seen friends both with a lot of money and with no money who are terrified to speak about it, terrified they’re doing the wrong thing and that if people knew how terrified they were, somehow the smoke screen they’ve set up will disappear.

Working with Chris allowed me to devise a system that takes the pressure off day-to-day scrambling. It has become one of the reasons I am able to do the work that I love, that I feel driven to do. Just knowing that my bills will be paid gives me a peace of mind I never thought I would know.

Seriously, thank you, Chris! I didn’t know life could feel this (relatively) carefree. Can you write my novel for me now? 

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

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How Much Tax Should I be Saving?

How Much Tax Should I be Saving?

by | Apr 15, 2019 | Taxes, What's the deal with Taxes?

Take 25% of every dollar and put it into a separate savings account for your taxes.

It’s good advice right?

But how do you know whether 25% is enough (or way too much)?

Honestly, it’s a tricky thing to figure out especially when you have no real idea of what your income is going to be in the coming year.

I don't know how much you should be saving... but here are few ways to think about it:

1. Use last year as a guide

A good place to start is with what you already know. Look at your tax return and find the number that shows you what your gross business earnings were last year. Be careful not to pick the ‘net income’ number or even the ‘taxable income’ number. Those are your business earnings after a bunch of deductions are taken off.

Instead, find the gross business earnings which is the total amount of money you made last year.

Now, find the amount of tax you owed.

Divide the amount of tax you owed by the gross business earnings and you’ll get a good working percentage.

The question then becomes: is it reasonable to think that this year will be like last year?

2. Harness the power of your fear to oversave for your taxes

I’m a big fan of fear savings. I use my terror of the Canada Revenue Agency to pick a percent that I know will be more than I need. The nice thing about that is that at tax time I get to give myself a refund. Yay!

It’s a great thing to do IF you can afford it, but of course for lots of you … that’s not possible.

3. Think through your upcoming year and play around with a tax calculator

If past numbers aren’t a good guide for you, sit down and think through your income goals for the year (or map out your income with THIS TOOL). If you don’t have any income goals… now’s a great time to play around with them.

This doesn’t have to look fancy. Just open up a TAX CALCULATOR and punch in numbers to see what kind of tax you might owe. It’s a good way to get a rough idea of what a good percentage is for you.

4. Set Milestones and times of year to check in

 The truth for lots of us is that the year is a giant question mark. We could scrape by with the bare minimum or get a windfall of work and make more than we ever have before.

The best method to manage that kind of variability is to make a plan… and then check in periodicially to see if you’re still on track.

Let’s say in January you decide that 20% is more than enough to cover your taxes for the year. Mark your calendar in April, July and October to check in and make sure that this still work. Track your income and use that TAX CALC again to see if you’re still putting away enough.

Remember this finance stuff isn’t a ‘one size fits all’ situation.

Your life is variable, and so your finances are going to have to stay flexible to keep up. The game changer is staying ahead of those changes instead of looking in the rear view mirror and knowing exactly what you ’should have done’.

The important thing is that we practice our technique. That we practise setting aside some amount and check in often to make sure that we're on track. 

You've got this!!

 

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

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I Don’t Want to do my Taxes Either

I Don’t Want to do my Taxes Either

by | Apr 8, 2019 | Taxes, What's the deal with Taxes?

UGHHHHHHHHHHHHH.

That’s how I feel about doing my own taxes.

Now you might think… Chris… you must love doing taxes, don’t you like money? Don’t you write about taxes and stuff all the time?

Sure. But they’re not MY taxes, and somehow that makes all the difference.

Like so many of you, it usually takes the emergence of something else that I really don’t want to do before I finally haul out the receipts and fill out the spreadsheet that my accountant needs.

Usually the motivation for taxes is more ‘stick’ than ‘carrot’ so this week I wanted to highlight a few good things that come from doing your taxes.

3 Really Good Things You Could Get by FIling Your Taxes:

1. If you’re a parent you gain access to the Canada Child Benefit. If your child is under 6 that could mean more than $6,000 of tax-free money… but you don’t get it if you don’t file your taxes. If you haven’t filed for a few years you could even get some of that sweet cash for past years too, You can learn more here. 

2. You get RRSP room. If you don’t know what an RRSP is or how it works you can read more about it here. For those of you who understand the general concept remember that the way you earn contribution room is based on your income… and they know what your income is from your tax returns.

3. If you didn’t make much this year and you’re thinking… why do I need to do this anyway… the answer is the GST/HST credit. Low income earners will get access to this benefit (and possibly other benefits as well) You can learn more here.

I Know it’s Not Fun… But Avoidance is Expensive

It’s a stupid system. It doesn’t need to be this complicated.

But for now, it is. And for now… you’ve got to do it.

And I promise you from the bottom of my experience, it’s generally not going to be better to wait. It gets more expensive and more stressful.

And if it helps, keep in mind the good things that can come from getting through all that filing and number entering. I've only mentioned a few, there are more programs, credits and perks that come from getting it done. 

Power through and make yourself a tasty snack! You got this. 

 

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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Office Hours Roundup: How do I Talk to My Partner/Family About Money (and Other Questions)

Office Hours Roundup: How do I Talk to My Partner/Family About Money (and Other Questions)

by | Apr 1, 2019 | Artist 2 Artist

We hold office hours once a month. People sign up for free and we talk about money.

We wanted to start highlighting a few of the many great questions people ask so that we can all learn from them and weigh in as a community.

The questions have been changed slightly and generalized to make sure to protect the privacy of these sessions.

 

Question #1: How do you help a partner or family member who isn’t as engaged in their finances as you’d like?

This is such a tough one and every situation is very different but I feel like the thing that spans every case is more communication … which is way easier to say than to do.

You’ve got to figure out ways to bring money into the conversation. Until that happens things are never going to get better.

BUT… let me be clear. Talking about money doesn’t mean that you jump right into the most stressful issues or tell them all about the things they really ‘should be doing’. Creating a foundation of communication is way harder than that. It will take time. It will take patience (on both sides).

I recommend to start with some fun topics. What do you wish there was more money for? What would you do with all the money in the world? What do you love spending money on (only a good question if it can be asked with judgement)?

And when the other person opens up… listen. Don’t try to fix things right away. Don’t leap into action unless they actually ask you to. Just listen. Just be there for them.

Most people avoid money because of the intense feelings of shame and inadequacy is brings up. Remember that and be as gentle as possible.

AND… if starting these conversations is simply impossible. Start having them on your own. Work in your own money fears and work into the conversation whether they respond or not. One day they might join the conversation.

Question #2: I'm doing okay and have a bit of extra money every month but I’m not sure what I should be doing with it… RRSP? TFSA? Mortgage? General savings?

First of all, it’s difficult for me to give any specific advice about what are the most efficient options without really diving into your numbers and projections, so here are some general thoughts.

What I would encourage you to do is to really think about what your overall goals are. Is this money for 30 years from now? Do you have upcoming things that need funding? Which out of these goals are the most important to you right now.

Getting really specific about which goals get fed first is going to help you allocate funds when they’re available. This is especially important for self-employed folks with variable income. We don’t know exactly how much we’re going to have available for these goals. But we can have a list of how we want to attack them when money is available.

Once you’ve got the list you can get a little more specific about action (this is not a recommendation, but just a hypothetical). 

  1. Pay off credit card - I’ve automated payments so this is done by November. Where did this debt come from? Am I making sure I’m protecting myself against building more debt?
  2. Pay down mortgage in 5 years - How much does it take to do this? What’s your pre-payment amount every year?
  3. Contribute to TFSA - how much do you want to aim for? What is this money for? Retirement?
  4. Build an emergency fund - what would this fund help you do? How much would you like to have in it?
  5. Contribute to RRSPs - how much contribution room do I have?

By looking at your numbers I can come up with the 'most efficient' choice, but that's only one factor. When it comes to which tools are right for you make sure you're always fixing yourself to a goal and then applying the tool ... not the other way around. 

 

Question #3: How to I wrap my mind around the costs of living in another country?

 

This is such a stressful thing. Moving is hard enough, but moving to a country adds so many unknowns to the equation.

I think the most helpful thing for me would be to start getting organized. When I’m packing for a longer trip I have two piles: things I’m taking with me, and things I’m leaving behind. You can do the same thing for your expenses.

Make a big list of what you spend on right now. What are your fixed costs, your other monthly spending and the annual stuff that happens every year.

Now… make a second list for your new country of residence. What are the expenses that you’re taking with you? Which expenses will probably be different and what expenses are going to get added to the mix?

That list is the collection zone for all your stress and you can use it to slowly start researching and putting together an answer to the question of ‘how much are we going to need when we move’.

Spend the next few weeks and months chipping away at this list one item at a time: what will we have to pay for housing? Are there any curve balls in renting that are different than here (in some countries you need to bring your own kitchen appliances or provide your own floor)? What might food cost?

Use google or ask people who have lived in these places what good thoughtful numbers might be.

If you’re not sure or can’t find good resources for where you’re moving make sure to budget for ‘a period of adjustment’. It always takes time in a new place to get set up and find the less expensive stores. There are also extra costs for setting up a new place.

The most important part of this exercise is to actually write it all down. Getting these thoughts and numbers out of your head is going to make it way easier to start wrapping your mind around the move.

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

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