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UNDERSTANDING YOUR PAYSTUB

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MAKING THE MOST OF EACH CHECK // Payday is typically one of the most anticipated days for many people. Sadly, it’s because a majority of Americans are living paycheck to paycheck -sources give a range of 58% (CNBC) to 78% (Ramsey). That means that if any of those people were unexpectedly unemployed, they would not be able to meet their financial obligations. What this means to me is that people are slaves to their job. They can’t afford to leave, because they can’t survive without their paycheck. This also means they can’t afford to be generous. Who doesn’t want to be able to live a generous life?

In order to stop living paycheck to paycheck, you either need to make more money, spend less of it, or do both at the same time. One of the simplest ways to spend less money is understanding your paystub. Your paystub is usually broken down into Pay, Deductions, and Taxes.

PAY // This one’s pretty simple. If you’re hourly, you get paid for the hours you work. If you’re looking to make more, consider two things:

(1) Are you allowed to work overtime and are certain days of the week or Holidays worth more overtime?

(2) How does your current hourly rate compare to industry average? Do you know what it would take to improve your wage? Are there certain skills or responsibilities that you can add to your repertoire to become more valuable?

If you are a salaried employee, overtime isn’t usually an option, but you can see what it would take to earn a raise. Notice I said earn a raise; it’s not always as simple as asking for one.

NOTE // There’s a good possibility that you would be able to find a job elsewhere that pays more, but the grass isn’t always greener on the other side. If you’re unhappy with your job, and it’s a bad place to work, that’s one thing – get out of there! If you enjoy your job but wish you made more money – get to work at finding out how you can improve. Also, remember that even though another employer may offer more dollars per hour, their benefits package may not be as strong. If a different employer offers you a $2 per hour raise, but has a terrible Vacation or Retirement package, that should be a deal breaker.

TAXES // I am not a tax professional and am not a tax expert, but tax deductions are usually Federal, State, Social Security and Medicare. There is nothing you can do to change Social Security and Medicare. That rate is set and is required to come out of your paycheck. Federal and State deductions depend on how you completed your W-4 Forms when you were hired. Usually, the more you claim for dependents, the less that’s deducted from your check. The less you claim, the more that’s deducted from your check. If you typically get a large tax refund at the end of the year, you might want to talk to your tax person and see if you need to change your Federal and/or State elections. Yes, it feels nice to get that “bonus” at the end of the year, but it’s better to have that cash now to pay off your debts and stop living paycheck to paycheck!

DEDUCTIONS // Your deductions are usually insurance and investment related. I could really dig down and geek out on pre-tax vs. post tax benefits, but let’s leave that for another blog. What’s important is to look at every deduction you have and make sure it’s necessary. Is your health coverage appropriate for your risk tolerance? Do you need your own health insurance or can you stay on your parent’s plan or your spouse’s plan? Are you paying for more dental coverage than is necessary? You don’t need to pay for a plan with braces if you don’t have kids that will need braces. If you don’t have glasses you probably don’t need a vision plan. Sometimes your health coverage will pay for an annual check-up. Remember that you can always change your plan at the end of each year. Ask your company’s HR when the next time is that you’re eligible to make changes on your insurance.

Your employer hopefully offers an investment plan, like a 401(k) or 403(b). If they offer a match in the plan, max that crap out! That match is free money that future you can’t afford to miss out on. If you’re living paycheck to paycheck, you wouldn’t want to do more than that match because you have other areas in your budget that need those funds. However, if you are going to waste that money going out to eat or buying new clothes, then keep investing it instead! Only stop investing if you’re going to use those funds with purpose.

GETTING STARTED // Look at each line item on your next paystub. On the Pay portion, brainstorm 3-5 ways you can think of increasing that dollar amount. On the Taxes portion, figure out if you need to change your State or Federal elections. Again, talk to a tax professional about this. On the Deductions portion, ask if you actually need everything that’s coming out of your check. Does this coverage fit your needs and risk tolerance and am I maxing our my investment benefits?

TO MY BOYS // “I’m so proud of you. I’m thankful every day that I get to be your dad! You are the very best parts of me. You are dearly loved by your mom and me. Now go out there and do your best.” – Dad

If you found this blog helpful, please share it with others!

THE ASCENT Part 2

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If you haven’t read THE ASCENT Part 1 – here it is.

ONE PERCENT IMPROVEMENTS // In his book Atomic Habits, James Clear talks about forming habits in a way that will last. He gives the example of starting the habit of first showing up to the weight room, instead of starting out with a big workout routine. If you overdo it right away, it probably won’t last. But if you can get yourself in the habit of showing up every day for 5 minutes, that can eventually turn into 15 minutes, then 30 minutes, etc. The initial barrier to breakthrough isn’t working out for 60 minutes daily for 30 days straight to establish a habit. The initial barrier is getting your butt out of bed, dressed, and to the gym.

He goes on to talk about 1% improvements each day. This may seem pretty irrelevant – I mean, how much of a difference can 1% make? Well, thankfully, James Clear does the math, so I don’t have to! “…if you can get 1 percent better each day for one year, you’ll end up thirty-seven times better by the time you’re done.”

This doesn’t account for the ceiling of certain goals. For instance, if I started January 1 by doing 20 push-ups and improved by 1% every day for the entire year, I don’t think I’d actually be able to finish the year strong doing 740 push-ups on New Years Eve.

I actually did do 20 push-ups on 3 separate days the first week in August, along with 20 sit-ups, 20 squats, 20 lunges, and 3 pull-ups. My goals isn’t to improve 1% every single day, but what would it look like if I just improved by 1 each week? By the end of 2022 would I be happy being able to do 41 push-ups, sit-ups, squats, and lunges. Would I be happy with 24 pull-ups? You bet! Could I imagine doing 71 push-ups and 54 pull-ups a year later? No way, but that would be amazing! So, I’m going to give it a try. 3 days a week I am doing what I call 20 push-ups+ (the + is all the other exercises of 20) and 3 pull-ups, and I’ll move up 1 additional rep each week. As I write this I’m up to 22 push-ups+ and 5 pull-ups.

MY UPDATE // 07.21.2022 vs.08.18.2022

7.21.2022 [above] // 8.18.2022 [below]

BASELINE // 07.22.2022UPDATE // 08.18.2022
WEIGHT209 LBS205.5 LBS
LDH120 U/L (low by 35)No Update
Cholesterol209 mg/dL (high by 9)No Update
HDL132 mg/dL (high by 32)No Update
3 Mile Run33:0428:56

GETTING STARTED // What area of your life would you like to see improvement? What is that 1% that you can focus on tomorrow to start getting you where you want to be? Maybe you’ve always wanted to learn a new language. Maybe you’ve always wanted to run a marathon. Maybe you’ve always wanted to go on an amazing destination vacation. It was starts with one step in the right direction. What is your one step to take each day, or week, or paycheck to get you there? You’ve got this!

TO MY BOYS // “I’m so proud of you. I’m thankful every day that I get to be your dad! You are the very best parts of me. You are dearly loved by your mom and me. Now go out there and do your best.” – Dad

A BREATHING EXERCISE

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JUST BREATHE // About 5 1/2 years ago, I experienced deep anxiety like I’d never felt before. I constantly felt like I was about to drown, just barely keeping my mouth out of water. I lived in fear that I was doing something wrong all the time. I lost 20 pounds because I had no appetite. I constantly had clammy hands, or I’d breakout in an uncontrollable sweat. I usually called it Irrational Fear. When I stepped back to look at the situation or imaginary outcome that I was so afraid of it was easy to see that it made absolutely no sense, but I still couldn’t control the feeling of anxiety, and I would let those feelings control me.

Fast forward to today. I still deal with anxiety, but it’s less frequent and typically less extreme. I stopped calling it my anxiety, like it was part of my identity, and I went through a program at my church called School of Kingdom Ministry that reminded me of who I am in Christ Jesus. So powerful!

I’ve been reading a book called How to Do Work by Nicole LePera. This book isn’t a book to help you learn how to work better on the job, but how to work on yourself by recognizing your patterns and healing from your past. The section that has stuck with me is a breathing exercise. Here are the steps:

  • Start on an empty stomach // Do this exercise either in the morning or at night.
  • Sit or lay down // Find a place with no distractions, or as few as possible. It’s important to not be standing or driving while doing new breathing exercise in case it makes you dizzy.
  • Inhale // Take a deep breath with your nose from the lowest part in your stomach. Breath as deep as you can go!
  • Hold // When you can’t take in anymore air hold your breath for 2-3 seconds.
  • Slowly exhale // Let the air exit your mouth without any force.
  • Regular breath // Take one regular breath between each deep breath.
  • Repeat 10x // Repeat this sequence 10 times, but for no longer than a minute starting out. When you get really good at it, the goal is to get up to five minutes.

A breathing exercise like this one has many benefits. It can help you be calm and more at peace. It increases lung capacity. Breathing exercises also help with stress tolerance. Going through anxiety, I have found that focusing on breathing can help take your mind off of the anxiety and on something you can control – your breath. Just today I was at the pool with my family. My 3 year old son is learning how to basically doggy paddle with a life jacket on. He’s still learning to get comfortable with holding his breath, so he panics immediately when he inhales some water. He starts flailing, and his eyes get huge as if he’s about to drown. My wife and I calmly tell him the exact same two words: Just Breathe. Once he focuses on his breath, he’s suddenly back in control and slowly paddling his way towards the ladder like nothing happened – this cute little puppy in a life jacket.

GETTING STARTED // This is a very simple one – just give the breathing exercise a try! I have found when I do it that I really can’t breathe very deep at all, but after I get 4 or 5 breaths in I can feel the difference.

YOU’RE NOT ALONE // If you are currently struggling with anxiety, know that you’re not alone. There’s nothing to be ashamed of. You have people that care about you and want to help. There’s a Bible verse that I’ve clung to through all my struggles with anxiety. It’s Colossians 3:2-3, “Set your minds on things that are above, not on things that are on earth. For you have died and your life is hidden with Christ in God.” There’s also a song that helped me called Breathe by Jonny Diaz.

TO MY BOYS // “I’m so proud of you. I’m thankful every day that I get to be your dad! You are the very best parts of me. You are dearly loved by your mom and me. Now go out there and do your best.” – Dad

MY [FAILED] MINIMALIST CHALLENGE

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CREATING BREATHING ROOM // My first exposure to decluttering was a show my wife and I watched called Tidying Up with Marie Kondo. After watching all 8 episodes we piled every single piece of clothing we owned on our bed to see what we actually had and went through one piece at a time. This was our bed on January 7, 2019:

I recently decided that each month I will focus on One Thing. The One Thing might be a new habit, something I want to learn, or just something I want to be more intentional about. For the month of July my One Thing was decluttering. In 2021 we purchased a larger home and our goal was to have a lot more space in the house, but not more stuff. It’s time to live out what we said we wanted.

Amy introduced me to the 30 Day Minimalism Challenge a while back. In this challenge you get rid of 1 item on the 1st day of the month, 2 items on the 2nd day of the month, 3 items on the 3rd day of the month, etc. And you finish up with 30 items on the 30th of the month. In total that’s 465 items in 1 month. If you want extra credit, choose a month with 31 days and get rid of almost 500 items!

Let’s be real, 30 items in a single day is a lot, but how many drawers of t-shirts do you have? How many 5K shirts have you kept for races you never even ran?! How many dress clothes that you plan on fitting in “some day” and how many baseball caps can you actually wear in a year? That’s just clothes! Let’s talk about the garage quick. How many screwdrivers do you need? Do you really need a bucket of spare bolts and washers? Then a quick walk into the bathroom. Why so many washcloths? By the time you walk through the entire house, 465 items probably isn’t as bad as you’d think! Especially if one LEGO brick counts as an item.

WHAT’S THE POINT? // What do you feel when you look at this picture?

Does this make you feel at peace or stressed? I feel anxious with a heaviness on my chest!

When you are able to get rid of the extra and have a home for everything in your house, you start creating breathing room for your life. You know what you own. You know where it goes. You know where it is. You have order in your life, you are less stressed, and you have more time and space to enjoy what’s left.

My 30 Day Minimalist Challenge started out pretty strong – I got rid of one item. Yes! A couple days in I pretty much stopped prioritizing this challenge, then had a vacation, then the month was gone, and all I had gotten rid of was 14 items. FOURTEEN ITEMS! Amy had decided to join me on her own, and she at least made it through Day 10, getting rid of 55 items.

I’m calling this My Failed Minimalist Challenge because I didn’t accomplish the goal I had set out to do. I didn’t even come close! I even considered skipping this month and not writing a blog about it because how credible do I look if I can’t even accomplish one of my first goals?! Even though I didn’t accumulate 465 items to get rid of, I would say that this challenge was not a total failure. Here were some of my takeaways:

  1. As a team we did get rid of 69 items. True, my wife carried the heavier workload there, but it was teamwork still!
  2. Amy decided to join in on her own initiative. It wasn’t something I coerced her into. She saw what I was trying to accomplish and wanted to join in. That’s pretty awesome!
  3. I won’t always accomplish 100% of what I set out to do in my life, but what is my response going to be? I plan on getting it done this time, and for accountability I’ll share weekly updates on Facebook and Instagram.
  4. Minimizing your home shouldn’t just be a month, it should be a lifelong activity. (My wife has waited years to hear this)
  5. Some items in your home just don’t spark joy and you don’t need to keep every item that sparked joy at one time in your life.

GETTING STARTED // This one is simple – get rid of 1 item today! I have a secret for you: You can start with 1 item even if it’s not the first of the month! Yes, it’s easier to keep track of it if you do, but are you really going to get rid of just 1 item, then 2, then 3? You’ll probably get rid of multiple items at a time and want to jot them down. Lucky for you, I created a checklist you can use!

Other resources I recommend:

TO MY BOYS // “I’m so proud of you. I’m thankful every day that I get to be your dad! You are the very best parts of me. You are dearly loved by your mom and me. Now go out there and do your best.” – Dad

AUTOMATE YOUR BUDGET

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AUTOMATING YOUR LIFE // Which do you think an average person is more likely to successfully complete in one month: their budget or their diet plan? Trick question – the answer is neither. I can only speak for myself, but I genuinely intend to sit down and figure out a game plan to cut costs for our budget, or to cut calories for my diet but fail regularly. You may commit to the point of creating a spreadsheet or buying a new pair of running shoes. Way to go! Day 1 – you rocked it! You cut out that breakfast donut, saving on both the budget and the diet. Day 2 – staying focused with the end goal in mind. Schwew, a little harder than yesterday. Day 3 – you forgot you had already committed to a dinner with friends. There goes the budget and how can you say “No” to dessert?! YOLO, right? Probably best to start over Monday. Wait, it’s only Wednesday. Oh well, might as well enjoy Thursday through Sunday and start all over again next week.

Does that sound familiar or is that just me? I think that by nature we are lazy, preferring the path of least resistance. It’s not necessarily a flaw; it might even be a survival instinct. If you have to choose between walking a mile on a flat, paved path or walking through dense jungle that you’ll have to hack your way through, which route would you take? Give me the paved way every time!

Mark Twain has been credited with the quote, “Quitting smoking is easy, I’ve done it hundreds of time.” Whether he actually said this or not is disputed, but the humor of it remains. Is this how you could summarize budgeting? Or at least your intent to budget?

Failed budgeting started for me at an early age. When I was old enough to mow lawns I started a lawn care business called “Lawn Boy.” Not very original, considering that’s the name of the machine I was pushing to mow the grass! I also had a newspaper route, but I somehow ended up with extra papers in my bag at the end of each route. But that didn’t matter, what mattered was the $7 I made from each lawn and $13ish per week from the newspaper route. My mom was, and still is, a big believer in an envelope budget system. She has a cash envelope for everything. Everything! I took my first check and bought myself a fireproof lockbox to tuck in my dresser drawer. I got three envelopes and wrote “Tithe” on the first, “Savings” on the second, and “Vacation” on the final one. Every time I got paid I would put a percentage of cash in each envelope, rounding to the nearest quarter. I was always diligent to put the cash in, but the problem was it was never ever used for its intended purpose. My “Savings” envelope had so many well-intending IOU’s written on it that were never paid back.

LESSONS I’M STILL LEARNING TODAY // My wife and I used the Dave Ramsey-ish system for most of our marriage and are thankfully debt free, except our house. We borrowed from envelopes all the time and never fully stuck to it. Why? It’s boring! Nobody wants to track every single dollar that they have. Just like a diet, we are good at it for a month or two then get off track and just quit. So, what’s the solution? Automate your finances.

When you look at your spending, where are you most successful and consistent with your money? I bet it’s when you setup to automatically have money come out of your paycheck for your 401(k), when you have bills come out automatically, or when you have a dollar amount sent to a savings account. Where do you struggle? Paying back cash to your buddy from work that you’ve been intending to pay back for the past two months. What makes it worse is that you work in the same building as him! Just hurry up and pay the guy!

I’ve been listening to a really good audiobook called I Will Teach You to Be Rich by Ramit Sethi. He shares a simple way of automating your finances:

  • Your take-home pay should fit into 4 different categories, I call them buckets:
    • Fixed Costs | 50-60% | rent, phone, utilities
    • Investments | 10% | company 401(k), Roth IRA, index funds
    • Savings | 5-10% | gifts, wedding, house down payment
    • Guilt Free Spending | 20-35% | restaurants, vacations, movies, whatever you want!
    • Note: The percentages above are of your take-home pay. For investments, calculate 10% take-home, then subtract out what you are already investing into your company 401(k).
  • Here is a sample of how you could automate your paychecks:
    • Paycheck – Part of this should go to your 401(k) through your employer and direct deposit the rest into your checking account
    • Checking account – Schedule your automatic transfers from your checking account. This would include your Roth IRA, Savings account transfers (ex: house down payment account), Fixed cost payments (ex: utilities), and Guilt free spending transfer into a separate checking.
    • Remit has Fixed costs and Guilt free spending comes out of a credit card. That’s up to you!
    • In a perfect world, it would look something like this:
      • 1st of Month: Pay Day
      • 2nd of Month: 401(k) + Checking deposit (this might happen already on the first of the month, but sometimes it takes a day to deposit)
      • 5th of Month: Scheduled transfers to Savings accounts
      • 5th of Month: Scheduled transfers to Roth IRA – 10% of take-home pay, minus the amount put into your 401(k)
      • 7th of Month: Auto-pay bills (some businesses let you change the billing date with a phone call)
      • Auto-pay credit card in full (if that’s the system you want to use)
    • This system is really simple if you’re paid once a month, or if you can save up a month’s income and start with that. Otherwise, if you’re paid twice a month you can use the 1st paycheck for bills and the 2nd paycheck for savings and investing. Or you can budget 1/2 of each payment out of each paycheck.

The goal isn’t to be perfect, but to get funds where they need to be right away so they aren’t misspent. Basically, get the money moved to Savings before you spend it all going out to eat. The awesome part of this system is having money specifically for whatever you want: Guilt Free Spending! Some people might not want to budget because they feel it limits them from doing what they want to do. This system gives you 20-35% of your paycheck to do whatever you want with it! But it helps you live intentionally with the other 65-80%.

This is the budgeting system my wife and I are going to try after the last 10 years of spreadsheets and Dave Ramsey-ish budgeting.

Are you going to try this method? What budgeting strategy works for you? What hasn’t worked for you in the past? Comment below!

Getting Started // You will first need to look at 3-6 months of expenses to see how this system will work. Whatever you find for the fixed costs, add a cushion of 25% in case you forget something.

To My Boys // “I’m so proud of you. I’m thankful every day that I get to be your dad! You are the very best parts of me. You are dearly loved by your mom and me. Now go out there and do your best.” – Dad

THE ASCENT

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OVER THE HILL // December 19, 1992 isn’t a day I remember well. It’s a day I don’t remember at all. I assume it was cold outside, and snow covered the ground because it would’ve been winter in Iowa. I would’ve been 11 years old, the youngest of three brothers. Jared, the oldest, would’ve been 17 and Ian 14. I have never been so fascinated about this day until now. Why? What’s so special about a day I can’t remember at all? That is the day my dad turned 40. I’ve been thinking about it quite a bit lately because today I hit that very same threshold. How is that possible?!

40 years old is referred to as Over the Hill. Those words give a mental picture of the beginning of decline. In sports it’s almost impossible to be this age and still compete at a high level. Few have defied age, like Tom Brady, still playing in the NFL at age 44. Heck, boys drafted into the NBA at age 22 are already called old. What?!

Image from: https://www.gq.com/story/tom-brady-retirement

What if 40 wasn’t the start of the downhill decline? What if it’s simply another mile marker? Or even an upgrade to version 4.0? I’m here to prove that the ascent has just begun!

In this blog, I will have a series called The Ascent, where I will document anything that I find beneficial to reach my ultimate goal: The Ascent to 100 years old. I will regularly update you on things I’m learning, things I’m trying, and my status as I start my ascent to 100.

I was recently listening to a podcast from Tim Ferris where he interview “Master Investor” Ed Thorp (The Tim Ferris Show | Episode 604). Ed shared a principle of Short-term vs. Long-term Thinking. The titles are pretty self-explanatory, but the impact could be life changing. When you only think toward short-term you will focus more on the now and make decisions based on the environment around you. However, if you use long-term thinking, you will look far past that momentary decision and weigh out the long game. My goal with this series is to make a majority of my decisions based off long-term thinking instead of short-term, or instant gratification. This will include diet, exercise, finance, and anything else that will help along the way!

I want to encourage and challenge you along the way. If you’re reading this at age 30 you might be thinking, “I still have 10 years until I have to worry about that.” You’re not wrong, but what if you gave yourself a head start? How much better off would you be then me? What if you’re 60 and thinking, “It’s too late for me.”? It’s not too late! There’s a Chinese proverb that I love that goes, “The best time to plant a tree was 20 years ago. The second best time is now.” You may not get your youth back, but you can do far better than you’re doing at this moment!

Getting Started // What is one area in your life that would see benefits from long-term thinking? What is one thing you can do to get that tree planted today?

To My Boys // “I’m so proud of you. I’m thankful every day that I get to be your dad! You are the very best parts of me. You are dearly loved by your mom and me. Now go out there and do your best.” – Dad