Best Financial Decision

Christmas Challenge: Post 3

I have always been concerned… well, let’s be honest, obsessed with money. Obsessed about making it, and obsessed about spending it.

Wow, what a turn-off introduction, but I promise you there is a point to this disgusting statement. 

My money inflow has always been decent. I was working part-time during my studies, and was privileged enough to receive financial aid from my parents as well as the government (Danish welfare system). Still, my spending got out of control. Just a little and “manageable” bit in the beginning. Then a bit more. Then, I applied for a government-backed student loan…

I was constantly worried and embarrassed about the situation. Not having control over my finances made me feel reckless and immature. For some reason I don’t understand, though, I never seriously tried to solve the problem. I just continuet to ignore it, thinking «next month I’ll do better» – but I never did. Oh, how I wish I could go back and shake myself. 

Fortunately, I landed a great job after uni, which allowed me to repay my student loan within the first year. (Yes, I am very much aware of how privileged I am, and eternally grateful to my parents and the Danish welfare.) I was so thrilled to be free of the financial burden, and shame that came with it. 

Still, I was concerned about my spending patterns: Am I spending too much on clothes? How much am I actually spending on food… and alcohol? Can I actually afford this weekend trip? Even more worrying, though, was the fact that I was not consciously saving money. Living on a financial month-by-month basis made me feel trapped, and fearful about the future. 

Two years into my job, though, I finally had enough of this constant worry. I was looking at apartments with my boyfriend, and seeing what money can buy – if you are smart about them – had a maturing effect on me. Especially, the exercise of calculating our apartment budget and repayment profiles. 

The greatest lesson of all came when we actually bought an apartment. This is when I  truly started to appreciate the concept of automatic payments. Although I was somewhat familiar with the concept, I had never really appreciated its relieving effect. Yes, it is nauseating to see that big, fat outstanding loan on my bank account statement. However, knowing that it is automatically being taken care of, and seeing the amount decrease is extremely satisfying.

This experience made me realize how liberating it would be if I completely automated my finances. Enter – at last – this years BEST FIANCIAL DECISION! Whoo whoo whoo! 

Here are the steps I went through to automate my finances: 

  1. Appreciating my income, by understanding what I actually make, and the possibilities and limitations my salary represents
  2. Understanding my spending, by categorizing all my purchases in my online bank account (yes, it took several Grey’s Anatomy episodes to do) 
  3. Optimizing my spending, based on my income, current spending, and financial goals (to me, this approximately means 40% on housing and repayment of loan, 20% on savings, and 40% on “me stuff”)
  4. Automating distribution of my income, by setting up automatic payments in my online bank account for the entire year, based on point 3

Now, I only have available on my account the money I am “allowed” to spend that month. The rest automatically goes to the repayment and savings accounts.

I have set up my system, so the money always gets a bit tight at the end of the month. I find this teaches me a valuable lesson on how I actually want to prioritize my money. In the beginning, it was a bit stressful, because I had yet to fine-tune the automatic payments (I initially tried saving much more, on account of my personal spending). However, now I have optimized and adapted my spending. 

Although I guess this system is basically a budget, it feels less restrictive because everything goes on “behind the scenes”, leaving me with a chunk of money I can spend however I like. I don’t know… I have probably not invented the wheel here. But this system works for me, and that I am so happy to no longer worrying about my spending and savings. Thus, this is the best financial decision I have made this year – nay, in my life! 🙂

Best New Habit

Our character, basically, is a composite of our habits…. Because they are consistent, often unconscious patterns, they constantly, daily, express our character and produce our effectiveness… or ineffectiveness.

– The 7 Habits of Highly Effective People, by Stepen R. Covey

Christmas challenge: Post 2

I remember myself as quite the morning person as a child, and recall early mornings on weekends with my dad, my mother and sister still fast asleep. Unfortunately, crazy and lazy teenage years destroyed this trait a long time ago. Although I am no longer in my teens, getting up in the morning is still a daily struggle. – No matter how early I go to sleep, it seems.

Something that has helped motivate me to get up, though, is my morning routine. This year I have gotten into a great morning habit, and the effect on my mood and productivity has been indescribable. Starting the day “right” sets a lasting tone for the rest of my day.

As mentioned, I recently read the book My Morning Routine, which shares interesting peoples’… well, morning routines. I have always been curious (to a creepy degree, I must admit) about how other people live their lives, and this book offers an exciting window into those sacred morning hours.

Although I struggle to call myself interesting (classic female insecurity?), I will go ahead and share my routine anyways through the My Morning Routine “framework”:

What is your morning routine?

My alarm rings at 06.30, but I usually snooze until 06.57 (thank you, Sleep Cycle, for this specific time). When awake, I use Sleep Cycle to check my pulse and the quality of my sleep. For some reason, it gives me a sense of comfort knowing that I slept well… and listening to my own snoring, which the app records, always cracks me up.

Then, I spend a couple of minutes going through my mail and social media. Although sleep aficionadas disapprove, I find that going through everything primes and prepares my mind for the day. Besides, because I am living abroad, it gives me great joy to check in on friends and family (aka dogs!) at home.

Once up, I make my bed, pull up the curtains, and start preparing my breakfast. I recently started eating entirely plant-based in the morning. Not only does this make me feel super green and cool, I also find that it has a positive effect on my digestion. So, go avocado and spinach. (!)

With my green smoothie in hand, I sit down and commence my Hour of Power. As earlier described, the Hour of Power concept is about focusing on yourself and something you enjoy. To me, this means blogging.

To ensure efficiency, I always set up my blog station (aka laptop, but that doesn’t sound as cool) the night before. I also mentally prepare the topic of the blog post, which I stick to until completion. I aim to have minimum three power hours during the week, which is approximately the time it takes me to complete a blog post. Then, I can relax on weekends with a conscious mind.

And that is basically it. On weekends and when traveling, I usually go with the flow and my mood. Sometimes, this means sleeping until the very last possible minute. Sometimes, it means blogging. Other (but rare!) times, it means getting up early to work out. After a couple of days, though, I begin to miss my routine. Luckily, it is always there waiting for me!

What about you, do you have a morning routine? And if not, have you considered getting one?

Celebrating 2018

Christmas Challenge: Post 1

When I was younger, I used to set New Years resolutions every year. They were pretty much always the same, always very wide… and never achieved. As a result, I have (mostly) abandoned resolutions. Instead, I try to focus on habitualizing concrete goals, professional as well as personal.

Although – or maybe because – I find this method more effective, I tend to forget to evaluate and appreciate progress towards my goals. Thus, I want to spend this Christmas Challenge to reflect on my achievements in 2018 within the following categories:

  1. Habits
  2. Finances
  3. Fitness
  4. Entertainment
  5. Personal development

I hope this challenge inspires you to reflect on and appreciate your past year as well.

Pictures: From London with Love, by Burberry