A Values-Based Way to Build Your Budget

Let’s be honest: budgeting sucks. There’s a reason everyone (including me) dreads sitting down and figuring out a budget. It brings to light all the things you spent money on that you probably shouldn’t have, and in the end you’ve got a list of super-responsible stuff to spend money on instead.

It’s the financial equivalent of eating your vegetables. Yuck.

But our philosophy at Gen Y Planning it to take the shame, fear, and guilt out of budgeting. If you want to spend money on dinners out, SoulCycle classes, or, hell, eyelash extensions (life changing!), do it! Money is a tool that allows us to live the life we want. If you squirrel it all away and never have any fun, you’re just not living.

They say that one of the ways to tell what’s most important to a person is to see what they spend their time on. So for 2017, I want you to try a values-based budgeting exercise: honor what’s important enough to you to spend money on. And be okay with that!

I wouldn’t be much of a financial planner if I didn’t sneak a few vegetables onto your plate (sorry) and tell you that, yes, it’s really important to save money for things like emergencies and retirement. And you can’t still do that while having money available for fun stuff. More on that in a bit.

First, here are some questions to ask yourself to determine what you really value.

What did you waste money on in 2016?

It could be impulse buys at fast fashion stores. Concert tickets for a musician you don’t like because you have FOMO and didn’t want to miss a night out with friends. Food you threw away because you didn’t eat it before it spoiled.

Anything you paid for that didn’t enhance your life is something you shouldn’t buy again in the future.

What are you proud of spending money on in 2016?

Maybe this was the year you finally hired a professional house cleaner, treated yourself to Amazon Prime, donated generously to a meaningful cause, took a sweet vacation, or saved up for a designer purse that you’ll use for years.

When I reviewed my 2016 spending, I learned that I was most pleased when I spent my money on experiences (like travel, concerts, and live theatre), and expenses that saved me time (Task Rabbit, house cleaning, and Instacart for grocery delivery).

If something brought you joy or freed up your time to do other things that matter to you, it was a worthwhile expense.

Adjust your spending to reflect your goals and values

It helps to be mindful of your spending without feeling shame. It you spent a lot in certain areas in 2016 (things like home decor or vet bills), those things are important to you, so save up for future spending in those areas (those vet bills aren’t going away anytime soon, after all!).

By committing to spending less on things that don’t matter and saying no to anything that isn’t important to you, you free up money that will fund what you love the most.

How can you do all this and not run out of money?

I’m a big fan of reverse budgeting. Often, people spend their take-home pay on bills first, then entertainment (things like shopping, restaurants, and travel). If there’s anything left, it goes into savings.

The problem is that it’s easy to overspend, leaving nothing left to save.

Try this: automatically transfer money out of every paycheck into your retirement and savings accounts. You can even set up multiple savings accounts that are earmarked toward different expenses (and have portions of your paycheck direct-deposited into each account — ask the payroll person at your office to help you with this!). By doing this, the money left over can be spent on bills first, and then you can spend the rest as you please, guilt-free.

Saving first and spending second allows you to meet long-term savings goals. If you’re saving for a house, car, wedding, grad school, vacation, or other large expense, you can do so more easily without noticing the hit to your wallet.

My wish for your 2017

My biggest hope for all my readers and clients is that you all make peace with your money and spend or save it according to your values. Not your parents’, not your friends’. Take the time to evaluate your spending so you can allocate funds to things that enhance your life, and stop spending mindlessly on things that don’t matter to you.

The article A Values-Based Way to Build Your Budget originally appeared on genyplanning.com.

Weighing a Job Offer? Look Beyond the Salary

You’ve been job hunting for months, and you finally receive a job offer. You’re desperate to get out of your current job, and the salary they’re offering looks decent enough, so you should just go for it, right?

Eh, maybe.

If you think of a job offer as a pie, the salary is but a mere slice or two. There are so many other factors to consider than would have a real effect on your happiness at this new job.

Money is important, of course, but it’s part of a bigger picture. If you ignore everything else in pursuit of a certain salary, you might end up more miserable than you were at the job you left.

What’s Your New Salary?

Obviously you don’t want to ignore their salary offer. But is what they’re willing to pay you enough? Hopefully before you interviewed, you did some research on salary ranges for your field and geographic area (if not, tools like Glassdoor can help).

Factor in cost of living in your area, or in the cities you’re willing to move to. A $50,000 offer is generous in some cities — and laughable in others.

If you are able to negotiate a higher salary, that could have a huge long term effect on your earnings over the long term. Not negotiating a $5,000 increase could end up costing you more than $600,000 over a 40 year career. The best to negotiate is when you accept a position at a new company.

What Are the Other Incentives?

If the offered salary is lower than you would have liked, are there other benefits that make up for it? Maybe an annual bonus would sweeten the deal. Does the company pay those? What are the bonus amounts based on? Are there years where no bonuses are offered?

Some companies offer their employees shares in the company stock, or have a profit sharing system where employees get a portion of the profits. And find out if the company offers a retirement plan — if they match your contributions to a retirement account, that’s a great benefit too!

How Does It Affect Your Quality of Life?

Never underestimate how soul-sucking a long commute or regular 12-hour workdays can be. What will you have to give up to make time for those long days? Will you have the flexibility to deal with doctors appointments, home repairs, or a sick kid needing to be picked up early from school?

Find out how much paid time off the company offers. Are employees encouraged to use it, or made to feel guilty for going on vacation or calling in sick?

Commute time has one of the biggest effects on your level of happiness. Some studies even estimate that a shorter commute is equivalent to a $40,000 raise! Before you agree to a new job, really consider how much time you’ll be in the car and how that could affect other areas of your life.

Everyone needs time to attend to their personal life, and if you’re spending half the day at work (or getting to and from work), that’s less time you have to tend to yourself, family, friends, and hobbies.

What About Company Benefits?

Benefits are part of your overall compensation package. When you don’t take advantage of them, you’re leaving money on the table. One of the most powerful ways I can help save my clients money is by helping themmaximize their company benefits. (Think you might want to become a client? Apply here.)

Read all the information you get about your options for health, disability, and life insurance. Would you be eligible for corporate discounts at area companies? Would you be able to go back to school on the company’s dime? Would your commuting costs, like parking or train fare, be subsidized? Are new parents granted paid or unpaid parental leave?

Do You Like the Company Culture?

It’s important to find a job for a company that fits who you are and how you do your best work. Maybe you need structure and strict scheduling to be productive. Maybe you like to wear suits!

You might be more casual, preferring a relaxed dress code and a results-oriented environment with less structure. Or maybe you’re like me — you just want to work from your couch in yoga pants. There are options for everyone!

But if you try to make it work in a company whose culture totally mismatches your own, you’re not going to enjoy your job. Look for opportunities that fit your style. In the long run, you’ll be happier and more successful.


This article was originally published on genyplanning.com and can be found here.

Investing: It’s Not Just For Rich Old People Anymore


When you think of investors, what do you see? Men in suits strolling down Wall Street? The Sad Guys on Trading Floors blog? Your parents chatting on the phone with their financial advisor?

A lot of Millennials don’t picture themselves as investors, and that’s a problem. According to a Facebook study on Millennials and money, our generation is 1.6 times more likely than Gen X and Baby Boomers to have no investments whatsoever.

A common theory  is that Millennials don’t trust banks, brokers, and other financial institutions, but the study shows that isn’t the case. While 12% of Gen Y lacks faith in financial institutions and the economy, far more don’t invest because they don’t think they have enough money (54%) or don’t know enough about investing (24%).

It’s Not As Complicated As It Seems

Any movie about stock trading will have you believe that investing is something done by stressed-out dudes who yell a lot, draw charts on white boards, and speak only in confusing jargon. The reality is that investing is, and should be, pretty boring.

The internet has democratized investing, making trading as easy as online banking. Contrary to what many Millennials think, investing is not just for the rich, well-established, and knowledgeable. It’s through investing over a long time that you gain that wealth and experience.

While there are mutual funds that have high minimum investments, and stocks with share prices in the thousands, there are lots of affordable options — and they’re not just for beginners! Many experienced investors are looking for the same things you are: low fees, easy diversification, and set-it-and-forget-it investing accounts.

Contribute to Your Retirement Accounts

Let’s not forget one of the best ways to get started as an investor: retirement savings. Before you begin any other investing, contribute enough to your 401(k) to get your employer match. Don’t miss out on that free money! That means if your company will match 50% of what you contribute up 6%, you need to contribute 6% in order to receive the full 3% match.

Next, max out your Roth IRA with a $5,500 annual contribution (you can divide this up into smaller contributions throughout the year).

Important Info: Note that there are income restrictions on Roth IRAs. If you make too much money, you’ll no longer be eligible to make a contribution. Make sure that you qualify first!

Once you’re fully funding your Roth IRA, then increase your contributions to your 401(k) until you’re maxing it out ($18,000 per year).

Start Investing for Mid-Range Goals

If you’re already on track for retirement, you might want to open a brokerage account so that you can save for those mid-range goals that are more than five years away but happening sooner than retirement. There are many high-quality discount brokerage firms, but a few of my favorites are: Betterment (ease of use and no account minimums), Vanguard (the lowest fees on index funds), and Schwab and Fidelity (both have commission-free ETFs).

I often recommend exchange-traded funds (ETFs). Index funds are great for new and long-time investors alike, but they have have investment minimums (usually around $3,000 and up) that might make them cost-prohibitive. ETFs offer the instant diversification of a fund, but they operate like shares of stock. You can buy as little as one share of an ETF!

There are lots of ETFs to choose from at under $200 a share, so you can invest smaller amounts of money on a regular basis, rather than waiting years until you’ve saved up thousands to invest all at once.

Whenever you’re considering an ETF or index fund, pay attention to the expense ratio, which is the percentage of a fund’s assets that go toward the cost of managing the fund. It’s also important to find out the trade fee, which is cost to buy or sell the fund.

Time is On Your Side!

You become a rich old person because you started investing as a not-so-rich young person. Waiting until you’ve “made it” means you’ll never begin, and that could mean you’ll head into your retirement years without enough saved up to support yourself.

One of the biggest advantage Millennials have is time. A nice, long time horizon will help decrease the effect market volatility has on your investments. It’ll also allow your money to grow thanks to the magic of compound interest.

What’s compound interest? Let’s say you invest $1,000 in ETFs that average a 5% return. After a year, you’ve earned $50 in interest. For the second year, you’ll earn 5% not just on your original $1,000, but on that $50 too, for a total of $1,102.50! You’re earning interest on interest! Compound interest is the secret to making your money work harder for you.

No Time Like the Present

While the gloom-and-doom reports on the news make investing sound like a scary risk, the reality is that with some smart choices, you can set yourself up to build wealth over the years. Just remember the basics:

  1. Start by saving for retirement, and then pick low-fee investments that lead to a diversified portfolio. Diversification will help make that portfolio less risky.
  2. Hold on to and contribute to, your investments on a regular basis for a long time. (I’m talking decades! Just ask Warren Buffett.)
  3. Stop watching gloom-and-doom reports on the news. That’s just general life advice.


“This article, Investing: It’s Not Just For Rich Old People Anymore, was originally published on genyplanning.com.”