Making the transition from working and having a sense of control over your income to trusting that your investments and savings will provide the income you need, can be difficult
How will the recently passed tax bill affect you? For most, taxes will go down. How much is based largely on your specific situation.
The following are things that you can do to help yourself in light of the recent tax bill.
1. Take any deductions that you can in 2017. This would include any charitable contributions or paying your 2018 property tax in 2017.
This is advantageous for two reasons: first, most people are in a higher tax bracket this year than they will be next year; and secondly, it will be harder for most people to itemize their deductions in future years.
2. Continue to take advantage of tax shelters that are offered through your employer like your 401(k) and any deferred compensation plans.
3. If you are in a lower tax bracket, take advantage of Roth IRAs and accounts that you can put money in after-tax now.
Change in the Tax Brackets
Below is a chart which shows the changes in the tax rates for all income levels. The green bars indicate a positive change (lower taxes) and the red bar indicates a negative change (higher taxes). From the graph, individual taxpayers making between $200,000 and $400,000 will see their tax rate increase, while the majority will see their tax rates decrease.
Increase in the Standard Deduction
One of President Trump’s original stated goals on his tax reform was to simplify the tax code. One area this was achieved was in eliminating personal exemptions and increasing the standard deductions.
In the past, the individual standard deduction was $6,350 and the personal exemption was $4,050, totaling an overall deduction of $10,400. The new, higher standard deduction is now $12,000, meaning if you didn’t itemize your taxes, you would be slightly better off.
The thing to remember is, you were able to deduct various items that exceeded the $6,350 standard deduction and now you’ll only be able to deduct items that exceed the $12,000, which will preclude many from being able to deduct specific items.
For couples that are married filing jointly, the new standard deduction is $24,000 versus the old standard deduction of $12,700, plus the $4,050 personal exemption for each person. The total deduction for a couple then would be $20,800.
The total benefit from the standard deduction for children goes away as there’s an additional $4,050 deduction for every child. The tax bill accounts for this by expanding the child tax credit from $1,000 to $2,000 per child.
Other notable changes
- Property, state and local income taxes were limited to $10,000 in total combined deductions. For states with high income taxes or people whose property tax exceed $10,000, this will limit many of the most common deductions seen.
- 529 plans can now be used for private elementary and secondary school. There is a $10,000/year limit on how much can be pulled out for each child per year.
- The health insurance individual mandate is repealed. Individuals and families will no longer be penalized for not having health insurance going forward. The intention behind requiring everyone to have health insurance was to increase the risk pool therefore leveling out the risk. While it is yet to be seen whether people will drop their health insurance because they don’t have to have it, it is known that many people have dropped health insurance because it was too expensive to maintain.
- Changes in deferred compensation. The new tax bill takes away the biggest benefit of deferred compensation, which is allowing your compensation to be deferred until you want to receive the money as income. The new law states deferred compensation will be taxed when there is “no substantial risk of forfeiture,” which many are interpreting as vesting. We expect to see changes to executive benefits in the coming year, specifically as it relates to deferred compensation.
- Increase in child tax credit. The child tax credit increased from $1,000 to $2,000 with $1,400 refundable. Also, the phase-out for claiming the child tax credit was increased to $400,000, which is a dramatic increase from the old $110,000 for married couples.
Hannah was recently recognized by InvestmentNews as a “40 Under 40”, an award given to individuals in the financial industry based on their accomplishment, contribution, leadership and promise. The InvestmentNews 40 Under 40 project spotlights people with “standout potential in the financial advice industry” and recognizes “young talent doing remarkable things”.
InvestmentNews Managing Editor Christina Nelson says, "these will be the leaders setting the course down the road."
Hannah flew to New York for a lunch on May 22 honoring winners. She enjoyed meeting and networking with other young professionals who share the same passion that she has for helping people with their finances. 40 Under 40’s motto is “passion fuels the future”, which Hannah saw evidenced in the group that was assembled.
“Given the passion, dedication and innovative spirit that are hallmarks of the U.S. financial advice industry, it’s not surprising we received more than 800 nominations when we put out our call for this year’s class of 40 Under 40s,” said Frederick P. Gabriel Jr., editor of InvestmentNews. “Whittling those nominations down to just 40 honorees was tough. But after reading our honorees’ stories, I have no doubt that InvestmentNews’ readers will feel as inspired and hopeful about the future of the industry as we do.”
Determine what you want in your elder years and start having those conversations with your family.
Is there any hope for my child? That may be the question you’re asking after reading our first two installments about the trend of overwhelming student loan debt and how it affects the Millennial generation. There is hope! In our final post about student loans, we discuss the options available to families to avoid the trap of crippling debt.
I’ve found my clients generally have some ability to help pay for their children’s or grandchildren’s education. The best thing someone in that position can do is to start having conversations early on about the cost of college. Those who can afford to help pay for some or all of a college education should create realistic expectations of what they will or will not pay for.
Ways to Save
For those families that want to help pay for a portion of their children’s education, but don’t have a sense of where to begin, I recommend the simple 1/3, 1/3, 1/3 strategy as a starting point. The expectation in this scenario would be that the parents would pay for 1/3 of the cost of tuition, the student would be responsible for raising another third of the funds (perhaps with a part time job or student loans) and the final third would be covered by academic, merit or other types of scholarships or grants earned by the student. While loans may still be part of the equation, they will be much lower and more manageable than borrowing money for the full tuition.
Successful financial plans for a college education take effort on the student’s (and parent’s) part well before college begins. Keeping grades up or researching other scholarships they may qualify for will take work. Finding a part time job and saving their earnings will require discipline. Parent’s must be mindful of discussing college funding options early on and help their students create and stick to a plan.
As college nears, continue the discussion of who is going to pay for extras while in school, including books, living expenses and “fun money.” Can your student balance a job and course work while in college, or do you want them free to focus on their studies? Each family is different and even within families, each child may be different.
Your ratios may end up being different than the scenario I’ve offered, but find an amount that works for your situation by discussing the options with your student. The more you can communicate the better off you will be.
For families with a deep conviction to pay all of their student’s tuition, saving and investing early can make a substantial difference. The 529 savings plan is an investment tool that allows funds specifically for college to grow tax-free. Another strategy that some (especially young) families choose, is taking a 15 - instead of 30 - year mortgage on a home. At the end of 15 years, when their home is paid off, they now apply that payment amount toward college costs. While it’s true that lower payments on a 30 year home loan can make it easier to set aside money each month for college savings, some lack the discipline to do this. While the math may not be perfect, it is a good way to help fund college through cash flow.
Programs That Help
Despite the prospect of loan repayment difficulties and college tuition costs continuing to rise, there are helpful programs emerging.
Many high schools are offering more options for earning college credits. An Associate’s Degree can be earned with a dual enrollment high school program. Having to pay for two years at a university is significantly less than paying for four. Ask your student’s counselor if their school offers this option. Along the same lines, Advanced Placement classes can count for some general education requirements if students pass a test at the end of the course. Check with the colleges you are considering to learn whether they accept AP courses for credit.
More community colleges are partnering with larger four year degree programs to offer tracks to easily transfer general credits. As these programs expand, more and more students see this as the route that makes the most financial sense. Besides lower costs for classes, you can also save on room and board costs that an away college would have. Community college is also an easier way to transition from high school to higher education. Smaller classes and campuses are easier to navigate and staying at or near home may be more comfortable for some students.
Costs can be reduced by doing your research! Visit the U.S. Department of Education’s Federal Student Aid website for suggestions on how to lower your college costs. Every student should fill out the FAFSA (Free Application for Federal Student Aid) to see if they qualify for grants or work study.
There are several federal loan repayment options available to college graduates. One option is the Public Service Loan Forgiveness (PSLF) program, which forgives the remaining balance on direct loans after having made 120 monthly payments while working full-time for a qualifying employer. Keep in mind, there are quite a few restrictions and limited employment options, but it’s well worth looking into.
While they may be tempted to refinance federal loans to private loans, students should approach this with caution, as it may eliminate debt reduction or other repayment options in the future.
Crafting a plan to pay for college takes time and effort, but is well worth it to avoid graduating from college with a mountain of debt. By doing your research and having discussions early on, you can give your student (and yourself) one of the most valuable financial gifts. So fear not; there are many ways families can manage college costs while ensuring their children get the education that is right for them.
As Millennials enter the workforce, the burden of student loan debt shapes their view of their lives, including careers and finances.
College may be one of the best economic decisions a person can make. Having a bachelor’s degree will on average increase lifetime earnings by 66% and even higher with advanced degrees. Students seem to agree; in 2015, 69% of high school graduates enrolled in a college or university program.
The downside to post-secondary education is the 510% growth in national student loan debt over the past decade. The impact is far-reaching: an entire generation’s financial growth has been stunted due to student loans. The financial burden of these loans has far-reaching consequences that affect decisions such as buying a house, starting a family and saving for retirement.
In the next several blogs, I want to look at the problems higher education costs are causing on the personal finance level for students and families, the cost for the Millennial generation, and what solutions are available.
First, I want to introduce you to a friend of mine, whom I recently interviewed about her education and financial history. Even though she’s been 20 plus years out of college, student loans are still a significant part of her finances and have shaped her perspective on money
Her story highlights several of the most prominent issues with student loans that I see.
Lack of perspective going into college
College is one of the biggest financial decisions in a person’s life, and students often lack the perspective necessary to make the best choice. The cost of some four year universities is upwards of $250,000. Many times the biggest financial decision high school students make is whether or not they should work a part-time job during the summer.
Combined with this lack of experience making financial decisions, many students have certain lifestyle expectations upon finishing college. Most teenagers have little clue how much money it would take to sustain the lifestyle they see themselves living. Without taking this into consideration, they may pursue degrees that are interesting to them without knowing if their chosen career path will support the life they want.
Using numbers may seem like a logical way to approach college funding. If a student wants to be an engineer, you could make a reasonable assumption on how much they would make based on the starting salary data and the school they choose. Knowing this, you could back into what a reasonable level of student loan debt would be.
The problem is, choosing a college major isn’t always easy or definite. According to the National Center for Education Statistics, 80% of students change their major once in college, and the average student changes majors three times. Many commit to a financial aid package without having this most useful piece of information, and knowing whether they are making a wise financial decision.
Another all-encompassing issue is what, beyond a degree, do you and your student want them to get from college? There is a lot of talk about return on investment, or whether you are getting your money’s worth by attending certain colleges. This has to be considered along with the overall experience of college. Some argue there is more to get from college years then simply coming away with a marketable degree. Some things you can’t quantify by dollars, such as personal, emotional or spiritual growth.
Lack of knowledge
In a recent survey by Nextgenvest.com, 68% of high school seniors said “they literally knew nothing” about student loan payment or refinancing services available to them after college. With an average counselor to student ratio of 476:1, it’s no wonder students are clueless. Beyond a token financial aid information night, there is very little communication on college financial issues.
Many students are expected to attend college, yet have little knowledge of student loans or how to evaluate various financial aid packages. Then there is the formidable task of filling out financial aid forms.
While there are many options for paying for college, the easiest is with student loans. Searching for and applying to various grants and scholarships, signing up for a service commitment in return for college funding, and working through college are all alternatives to borrowing money, but require significantly more time and energy to secure. Many students find it easier to take out loans, while failing to understand the full magnitude of the debt they are incurring.
don't know much about Personal Finance
High school personal finance classes are required in only 17 states. Students enter college with new found freedom and are easily enticed to sign up for a credit card in exchange for a pizza. Plastic in hand, most students lack fundamental knowledge of APRs and the pitfalls of debt. As you heard in my friend’s story, students are woefully unprepared to deal with decisions about debt.
Former Federal Reserve Chairman Ben Bernanke summarized the need for financial education:
“Financial education supports not only individual well-being, but also the economic health of our nation … Consumers who can make informed decisions about financial products and services not only serve their own best interests, but collectively, they also help promote broader economic stability.”
What worked 30 years ago doesn’t work today
Parents are many times the most influential force in helping students decide whether and where to go to college. However, the college landscape has changed significantly over time, even in the last 10 years, and doing what worked for mom and dad will often not work now. The cost of tuition between 1971 to 2015 at public four-year schools went from approximately $500 per year in current dollars to $9,139, meaning the cost of tuition has increased over 1800%! College tuition is growing on average more than 6% above inflation every year, begging the question, how is this sustainable?
In our next post, we’ll discuss how student loan debt has affected the Millennial generation and what each family can do to prepare for the costs of higher education.
When I first worked as a financial advisor at a broker dealer firm, I was taught the “two hat” training. When I discussed financial planning with clients, I wore my fiduciary hat. This meant the advice I gave had to be in the best interest of the clients. But as soon as the conversation moved to investments, I was required to replace my fiduciary hat with my salesman hat. The conversation continued and clients had no idea that my role had changed. Sure, it was included in the stack of disclosures they received, but I doubt many people read that far. Even if they waded through the legalese, did they understand the ramifications of these two hats that my employer required I wear?
I strongly believe the advice I gave was always in the client’s best interest. But there was no legal requirement for that to be the case. As you can imagine, there’s tremendous room for advisors to put their own interests ahead of their client’s.
Now there are advisors who operate in the “two hat” world that I wouldn’t hesitate to send my family to. But I wouldn’t have the same confidence if I didn’t personally know the advisor. It’s sobering to think that millions of Americans are in that very predicament. Who do you trust with your financial future?
Definition of a Fiduciary
Unfortunately, from an advisor’s standpoint it’s complicated. It’s understood that a “fiduciary” is one who acts in his or her clients’ best interests. However, defining what “best interest” means varies from one regulatory body to another. There are at least nine definitions of what it legally means to put your client’s interest first, or be a fiduciary, and some argue that many of those definitions are lacking.
One of the core missions of Guiding Wealth is to simplify complex situations for our clients. I want to make it clear that any advice I give my clients is in their best interest, not mine.
That’s why I will be classified as a “fee-only” firm and advisor as of April 1st. Fee-only advisors do not receive commissions for selling financial products. Rather, they are compensated either hourly, with a retainer or by a percentage based on assets they manage, reducing conflicts of interest.
A Higher Standard
Becoming a fee-only financial advisor means choosing to subject my firm to the highest level of fiduciary standard. There are no exceptions for special circumstances, types of account or any other loopholes commonly used. What I charge is completely transparent. Clients either write a check for my fees or see it as a line item on their statements.
While there will always be a potential for conflicts, choosing to become a fee-only advisor is the best assurance I can give to those looking for a financial planning firm they can trust.
Having a financial plan in place that takes full advantage of retirement accounts helps you to avoid uncertainty about the years to come
When considering a Donor Advised Fund, there should be a balance between aggressively funding your giving goals to save money on taxes and assuring that your other financial goals are being met as well.
In the past two posts I’ve been writing about my client Evelyn, who recently experienced one of life's major transitions. In this final post, Evelyn has more advice for what can be a difficult period for some people.
When deciding what she wanted for her elderly years, Evelyn compared options and consulted her children. “There’s been a lot of growth and what has been so crazy about it is my kids have loved it.” Evelyn notes that at first her son, in particular, was concerned about her decisions. “'Oh dear, she’s moving to a retirement center, I may have to take care of her.' That’s what scared my son.”
After discussing a possible move out of state to be near her kids and the eventual retirement community she chose close to where she currently lived, her children saw she was making the right choice. While she wanted to consult with them, she made it clear she was going to be independent.
Her advice for other retiree’s children is not to take decisions away from their parents. She notes that fortunately, her children have strong boundaries.
“I must have done something right. They didn’t come and get me [when she was sick]. They didn’t make me move to Memphis. They never thought they had to take care of me. They knew I could do it. And it’s really made them happy that I’ve done this on my own. I’m just really grateful my kids are independent and they know that I [am] going to be independent.”
To those who may be looking at a similar transition within a few years, Evelyn advises, “take your time. Get to know yourself really well. Know what you want.”
Getting to know yourself to Evelyn means, “getting down to my true self. Letting go of what a lot of what the world says you need to be. And I think that comes a lot with aging. A lot of that is about not having to live up to expectations. “
Another thing Evelyn chose to do was “not compare myself to my friends. No matter how much money you have, there will always be people who have more money than you do. That doesn’t matter. You have to figure out what is right for you and just do it.”
This was especially important as she set a budget. “I’ve always had a budget, but when you aren’t making house payments anymore, there’s so much that [is] there.” Although Evelyn was aware you shouldn’t spend more than you take in, she had to grasp the fact that “when you retire you are already spending more than you take in.”
Evelyn credits You Need a Budget with helping her get her expenditures under control. “It helped me get my entertainment budget in line…to decide how much I needed, what entertainment I wanted to do and what was right for me. Just because my friends did it, didn’t mean that I had to do it.”
Evelyn is looking forward to the continuation of things she’s always done, like finding a way to teach, and exploring writing and art. She is also excited about meeting people in her new community. “The possibilities are endless.”
While a retirement community might not be right for everyone, there are lessons to be learned from Evelyn’s experience. Soul-searching, research, consulting with family and facing the future bravely can make a big difference in easing what can be a time of turmoil. It’s up to us to look at any transition as a new adventure with new opportunities. We can either languish and fade away or we can choose to bloom.
This is the second part of my interview with my client, Evelyn, a 73-year-old divorcee and retired high school teacher, who is going through a new transition. In my last post, we touched on Evelyn’s decision to move to a retirement community. In this post, I want to share more of Evelyn’s thoughts on what helped her make this decision. One of the resources that has helped Evelyn is a book called The Gift of Years: Growing Older Gracefully by Joan Chittister. In the chapter titled Adjustment, Chittister says, “A burden of these years is that we must consciously decide how we will live, what kind of person we will become now…how alive we intend to be.” Evelyn echoed this: “This has been an extremely interesting part of my life. It has been a real growth process. I’ve learned more about myself.”
She notes that the transition to retirement was modeled by the women in her life. “I started early. My mother had moved into a retirement center when my father died. She had flourished there. It was really good for her. My model before that even was my grandmother, who had moved into a retirement community and she flourished. She had regular meals and got dressed up every day. There were people that she had known all her life and they were there. There were classes she took – she was very creative. That was my model of what you did when you retire.”
These examples served Evelyn when several things happened that led her to think about her own transition.
“It was critically important for me to maintain my house. I knew I didn’t want to live here if I couldn’t maintain it. My house is nearly 60 years old, there’s stuff that is going to happen and so it was like, it’s never going to be in any better shape than it was.”
Besides realizing it was the right time to sell her home, another factor was Evelyn’s health. “After I was really sick this fall, I realized that I wanted to be somewhere that if I wanted to go to the doctor, I didn’t have to depend on a friend to take me there.” Having convenient access to medical care became an important consideration to Evelyn.
And so Evelyn began to look at her options. She had always assumed she would rely on her children at this stage of life and considered moving to Memphis to be near them. After looking at living arrangements there, she realized that it would be much more expensive and nothing would be familiar. At that point, Evelyn realized that she didn’t need or want to rely on her kids. “I had to realize that I don’t want them to do this. I had to be really grounded in reality and know that I wanted to take care of myself for the rest of my life. And when I was unable to care for myself, the money [would be there] for the assisted living. That was part of my legacy to them.
“The good part of looking and slowly coming to terms with this was that I began to [consider] what was important to me. I can remember saying to my daughter, I can give up space. As long as I have a place to go outside, I can have just a few pots to put my geraniums in and my pansies in the winter.” Evelyn’s other criteria was that it be light with outside views.
Upon visiting a local retirement community, Evelyn knew it was the right place. “When I saw this [retirement community] and it was a price I could afford…and still have the medical care that I need...it was like, that’s it.” After having looked at many other places, “it just felt like home.”
When Evelyn put her house up for sale, she enlisted help to organize her belongings and stage her home. “That part has been helpful.” It was time to decide what to let go of. Evelyn had things taken to her attic and had “one side for sale and [one side for] what I’m going to take. I thought my books would be hard [to give up], but I don’t need that anymore.” As Chittister says in her book, “a burden of these years is the temptation to cling to the times and things behind us rather than move to the liberating moments ahead. A blessing of these years is the invitation to go lightfooted into the here and now.”
Although Evelyn is confident in her decision, she has at times felt conflicted. “There have been some sad times. There was one day last week and it was like, oh my gosh, I’ve lived here for 43 years. Both of my children grew up here, they walked to elementary school, they went to high school. All their friends were here. I’m going away and leaving that, but… I’m ready. Occasionally the sadness hits, but it doesn’t really ever stay very long. It’s more like, alright, this is so good!
“I’ve realized such freedom. It was so clear, but it took some meandering to do it. I know what I want to do and this is it."
I am incredibly privileged to work with people I admire – both for their professional accomplishments and for their personal character. Working with them during transition can be particularly rewarding. I was fortunate to recently interview one of my clients; Evelyn, a 73-year-old divorcee who is going through a new transition in her retirement years.
I have known Evelyn for seven years now and have always admired the intentional way in which she approaches life. I've written about this in the past and understand that there are stages that all people go through at those times. When I was first introduced to her, Evelyn was making the transition into retirement. She recently decided to sell her home of 40 plus years and move into a retirement community, which is what prompted this interview.
Evelyn had considered many of the options available to someone in her position, from choosing to move out of state to be closer to family or into a local retirement community, to downsizing or continuing to live in her home. Now, as she prepares to move forward, she is hopeful and excited about the transition.
Not everyone is as confident when it comes to making the choice to sell their home and start on a new adventure as Evelyn is. I wanted to understand what made Evelyn different from other people who have struggled to make this transition. It’s interesting to me because I find myself having these conversations with clients more and more. While I can advise from a financial standpoint, I am far from making this transition myself and know the experience is far from simply financial. I also wanted to share the resources and wisdom Evelyn imparted, which she has graciously encouraged me to do in these blog posts.
I want to share my conversations with Evelyn in three parts. This first post includes my observations and what I gleaned from our conversations, as well as Evelyn’s written “Wisdom for Moving.” The second and third parts will include transcripts of our discussion, because try as I might, Evelyn’s perspective is best shared in her voice.
Here are a few of my observations:
Mindset has been a buzz word in the financial planning world. Mindset refers to the belief that one’s attitude towards a situation has the power to change the outcome. Many studies support this, especially mindset’s affects in relation to retirement. Simply having a positive mindset towards retirement increases longevity by an average 7 years!
As you read Evelyn’s words, I’m confident you’ll see the correlation between Evelyn’s mindset and the outcome to her situation.
The “New” Stage of Life
Soon after I spoke with Evelyn, I heard Marc Freedman speak. Marc is the founder and CEO of Encore.org, which advocates a movement rethinking retirement. Marc is shedding light on the phase of life that exists after one quits their job (traditional “retirement”) and the later years of life.
What I think is so brilliant about Marc’s work through Encore is the notion that retirement is not an ending point, but simply another step in life. He issues a call to “accept the decades opening up between midlife and anything approximating old age for what they really are: a new stage of life, an encore phase, ripe with promise.” One of my favorite lines from his talk was “It is a great travesty that we have tried to make retirement an imitation of young people.”
As I reflected back on my conversation with Evelyn in light of Marc Freedman’s presentation, I saw this played out in her life. She has embraced the wisdom that only years can bring and has intentionally searched for what fulfillment means to her now.
The Idea of Legacy
The more Evelyn shared with me, the greater appreciation I had of what legacy means. In thinking through her options, Evelyn found herself returning to how her mother and grandmother made this transition. The legacy those women left was the grace with which they approached retirement and moving into a retirement community.
As Evelyn makes this transition, I can’t help but think of her daughter and granddaughters and what they will remember when they too make this transition later in life.
Evelyn’s “Wisdom for Moving”
Being grounded in reality is fundamental. Reality includes financial, physical, and emotional.
- Cost of house maintenance
- Retirement budget
- True self
- No comparison to others
Starting to think about where and how I wanted to live in the latter part of my life:
I started early and looked at several options. I always thought I would move to Memphis where my daughter and her family live. I thought about it as early as 20 years ago, but for many reasons it was never the right timing. Later, I considered moving to where my son and his family live. However, it was never a serious consideration for several reasons.
My daughter was helpful in going with me to look at retirement centers in the Memphis area. The cost went up considerably from the time I started looking until I was ready. But looking allowed me to decide what I really wanted. I realized that I had to stick to my budget – that I had to be responsible for taking care of myself for the rest of my life. I learned that I could sacrifice space if I had outside space and if I could look out from all areas. In fact, it is freeing to "unclutter" and to “uncollect”.
It’s never too early to consider the life you’d like to lead after retirement. Read more of Evelyn’s words of wisdom in the following posts. I think you’ll find her story offers encouragement in making these big decisions.
P.S. Sign up for our newsletter in the sidebar and receive our free transition tools download. Learn what to expect in transitions and how to navigate them smoothly with this helpful guide. Who couldn't benefit from making transitions easier?
Last fall, I asked a 5th grade class via Twitter what they thought the best money advice a financial planner could give was. They sent back the following list:
- Buy things that last
- Separate needs from wants
- Spend money on the things you will use
- Spend money wisely
- Don’t eat at restaurants, they are expensive
Pretty smart kids, those fifth-graders! This week, I got to meet those students in person when I visited their class. The ideas we talked about were simple, but the concepts hold true whether you are a grade school student or well into adult life.
We began our discussion by finding out how the students earned their money. One student said she got money for helping with her siblings, another said he does chores. One enterprising youngster said he helps his grandpa sell horses!
When asked what they spent their money on, one girl summed it up best: “whatever I want!” Oh, to be a fifth-grader again!
The teacher had asked that I incorporate some math into my discussion with his class, and there’s no doubt that a financial planner’s favorite math is compound interest!
One of my favorite quotes says, “He who understands compound interest, earns it, he who doesn’t, pays it.”
Interest was a new concept to this class. I began by explaining mortgages. It made sense to the students that a bank would want something in return for loaning money to someone to use for buying a house or a car. It was a logical conclusion then, that if they were going to invest money, they would expect something back (interest), just like the bank would.
Next I asked them how much money they would have at age 55 if they saved $50 per month starting now (at age 11).
They determined they would have $26,400 ($50 x 12 months = $600 x 44 years = $26,400); a tremendous amount of money to these eleven-year-olds!
We started working through the math, calculating how much they would have if they invested the $50 per month, every month, for one year and earned an 8% interest rate. The math problem looked like this:The idea that you could make almost $100 in two years without doing any extra work was exciting to these students. However, they still couldn’t see just how impressive compound interest was. So I tried to show them the bigger picture by demonstrating how much the investment and interest added up to over the years.
The class guessed that with compound interest they would have a number close to double what they would have saved at $26,400. But we did the math, finding out that if they would invest $50 per month (or $600/year) at 8%, they would have $214,169 at age 55, over eight times as much money as they would have saved by putting the money in a checking account.
Of course, when you invest in real life, the return doesn’t happen in the same linear way we figured out the math above. As we all know, actual investing is much more volatile and goes up and down by the minute. But the basic principle remains the same: investing and earning compound interest over the long term will multiply your initial investment exponentially. It was a dramatic illustration to fifth-graders, but can be applicable to whatever stage of life a person is in.
I enjoyed my personal finance lesson with those bright and earnest kids, but I’ll leave it up to someone else to teach the lesson about the hazards of spending money “however I want”.
As I’ve been examining why I have been resistant to goals, I have started re-thinking how I approach them, and I’ll tell you why. A goal is a clearly defined personal objective, something you want to achieve in a specific time period. What I have recently realized is that there are different types of goals; not all goals are equal nor should they be executed in the same way.
Just as you wouldn’t train for a sprint the same way you would train for a marathon, different goals will require different approaches.
There are three main types of goals: short-term, long-term and on-going goals.
During college I went through several intense, short-term goal periods. One particular summer, I regularly worked 80+ hours per week to pay for my fall tuition bill. I taped a goal meter on the wall next to my bed with the exact amount that I needed by the end of that summer marked on the top of it. Every time I earned a paycheck from my various jobs, I would take a red marker and draw in how much closer I was to my goal.
As the summer wore on and I wore out, that meter served as motivation. It prompted me to pick up another shift or not spend money. It was a constant visual reminder of my goal and exactly where I was on my way to achieving that goal.
That lifestyle was not sustainable over a long period of time, but it was doable for three months.
Short-term goals, as the name implies, are ones that can be attained in a short time frame. They can be goals that we are willing to dedicate an intense amount of energy to, although not all short-term goals are worthy of that energy. As an added benefit, their relatively immediate results allows us to clearly see how achieving our goals helps our lives.
Motivation techniques, such as a poster on your wall marking your progress, or an inspirational photo, work well for short-term goals. An action plan with specifics allows you to cross items off as they are achieved. Tracking incremental advancements can serve as motivation to keep going. Remember to keep day to day goals realistic, otherwise, you won‘t feel you are making progress.
A word here about accomplishment: as I said in my previous post, I have come to realize the wisdom in pausing to breathe as part of the goal setting cycle. Resting after completing a goal allows reflection on your accomplishment, gives perspective and re-energizes you for the next task.
Retirement is a long-term goal for me and my husband. I know that we need money saved, but because I haven’t formed specific plans for retirement, I don’t know what that will mean for us.
I can imagine the type of life we would want to live, but because there are so many unknowns, it’s next to impossible to anticipate the budget we will have. Even people who are a year or two from retirement often have trouble envisioning what it will look like!
However, just because I can’t clearly envision the specifics of that goal doesn’t mean I shouldn’t be setting a target for it.
Long-term goals are directional. I’m aware of the general direction I need to go to reach our retirement goal, even though I don’t know the details. I know that saving monthly for retirement now will give me the freedom to make more specific decisions down the road.
Treating a long-term goal like a short-term goal is a recipe for disaster. For a short-term goal, I may look at my bank account daily as a way of seeing if I am I on track. If I were to attempt the same thing for a long-term goal, like frequently checking a retirement account, the process would be frustrating at best.
Another example is a career goal. If your goal is to be in the C-suite of your company, revisiting how you have yet to attain that goal daily, weekly or even monthly will discourage you and set you back.
Long-term goals are the directional goals that you re-visit over time.
After months of spending too much at the grocery store and throwing away far too much food, I decided it was time to get my grocery shopping budget under control again. While that may seem simple to some, it is a goal that requires constant on-going attention and energy from me.
I sit down and plan out our meals once a week. If every meal is planned, I no longer have to decide multiple times throughout the week whether to eat what we have on hand or find an easier/faster option.
If you approach an on-going goal, such as regular exercise or controlling your budget, the same as you do a short-term or long-term goal, you are setting yourself up for failure. Sprinting for on-going goals becomes exhausting and not checking on them regularly makes it more likely that they won’t happen.
Clearly I won’t ever attain perfection in my goal of eliminating all the wasted food in our lives by meal planning. There are going to be successes and there are going to be days where I simply don’t have the time or energy to follow the plan. This is to be expected. Think of on-going goals as behavior training.
An article on the Mind Tools website reminds us that “unless you clearly define exactly what you want and understand why you want it the first place, your odds of success are considerably reduced”. When setting goals, remember the SMART acronym: they should be Specific, Measurable, Attainable, Relevant and Time-Bound.
Next time you set a goal, recognize what type it is (short-term, long-term, or on-going) and the amount of energy or patience that will be necessary. Having clear expectations and awareness of your direction will increase your chances of successfully attaining your goals.
I have struggled with goals lately. As a financial planner, I’m naturally wired to set goals. An integral part of working with my clients is looking at their goals and the financial ramifications of those goals. In fact, some of the most powerful meetings a financial planner can have the privilege of attending are those in which someone realizes that a dream they never thought was possible could actually become a reality.
Goal setting is powerful and necessary. I understand that, but I found myself resisting the idea of setting goals recently. This resistance was unfamiliar and something I simply didn’t understand.
When I don’t understand something, my first response is to try to figure it out. Why was I having an aversion to setting goals for the first time in memory? I had conversations with business consultants, goal-orientated friends and anyone who would talk to me about it. The common theme I heard was that once you achieve your goals, which was where I was at, you reassess and create new goals. It’s the cycle of success: set goals, achieve goals, set new goals, achieve those goals. Lather, rinse, repeat.
I found myself asking – what if I’m content, what if I have everything I want? I have a business I love, my family’s income is comfortable and I’m further along in my career than I could have imagined even a year beforehand. What if I don’t want or need more at this point?
Recalling my conversations about goals, I realized there is a lot of wisdom in being content. The purpose of life is not simply to achieve more, be more and have more.
After recognizing this, I decided to appreciate and enjoy this season of life that I had worked so hard for. I began, for the first time in my career, to allow myself to have slow afternoons and not look for a new designation or training or ways to grow my business.
As I freed myself from the pressure of achieving bigger and better goals, I found that I was resting.
Resting allowed me to focus on my daily life and enjoy my daily routine. Resting meant that my husband and I started spending time together instead of sacrificing that time for future career goals. Resting opened time in my calendar to drop everything for a friend who needed help one afternoon.
Resting has given me a better perspective. According to an article by Ferris Jabr in Scientific American, "downtime replenishes the brain’s stores of attention and motivation, encourages productivity and creativity, and is essential to both achieve our highest levels of performance and simply form stable memories in everyday life." Times of intense, focused work are for a season and are not supposed to be the constant. It’s good to allow periods of time to enjoy our accomplishments, instead of pushing them aside to move on to the next goal, just as it is good to have times of intense work. Besides, life has its ups and downs and different phases. There will be times in my life when I won’t have the luxury to relax; I’m guessing it’s wise to enjoy this slower pace while I have it.
Looking forward, I have several projects I want to start, but happily realize that I’ll be starting from a place of rest rather than a place of exhaustion. I now have the energy and focus to dedicate the time and mental exertion to what needs to be done.
I have come to realize the wisdom in pausing to breathe as part of the goal setting cycle. In fact, I would argue that resting is essential to successful goal setting and accomplishment.
Clients describe the meeting as shocking, even while admitting that they knew it was coming. It’s the financial planning meeting in which we look at their retirement projections to see if they are on track to meet their financial goals.
Some couples have figured it out. They know what they can spend; they live on a budget and have saved enough to be comfortable the rest of their lives. But for other couples, the meeting highlights adjustments they knew they needed to make.
And by adjustments, that can mean dramatic changes in their current lifestyle.
What to do when your lifestyle needs to change?
Get concrete numbers
When you come to terms with the fact that your lifestyle has to change, get concrete numbers. Talking in the abstract about needing to “cut back” is a lot different than knowing exactly how much money you need to be saving every year and what your ending budget number needs to be.
There are important numbers to consider when looking at spending cuts versus retirement dates or goals. If you were to work an extra year or five years, how does that change your financial picture? Often, those changes can have a dramatic effect on what you need to cut back.
Work with a financial planner
There are resources online, but I encourage you to find a financial planner you feel comfortable with and work with them through this process. Besides developing a relationship that aids financial recommendations, they can give you insights based on similar people’s experiences that they’ve worked with. A good financial planner will get to know you personally and offer advice tailored for you and your situation.
A knowledgeable financial planner will also help you identify the other areas in your finances to be aware of, expert advice that will help you should something unexpected happen. One gap in your insurance and an unfortunate incident can destroy your financial plan and everything you are working towards. Obviously, I’m biased, but I truly believe that the investment is worth it.
Identify your values
Knowing your values makes financial decisions so much simpler. It becomes easy to lose sight of what is really important to us, much of which doesn’t require a lot of money, and focus on the extras of life. Living life within your values creates the framework by which you begin to make intentional decisions.
In his New York Times column, David Brooks says it well: “Early in life you choose your identity by getting things. But later in an affluent life you discover or update your identity by throwing away what is no longer useful, true and beautiful.”
Consider Cutting Back Big
Big lifestyle changes are hard. Much of the popular advice you hear these days advocates cutting back on purchases like your everyday latte at Starbucks. While it’s true that small changes can make a difference, those results will be more subtle and long-term.
When you are faced with a lifestyle change, you must put all the options on the table. Some may be painful: downsizing your house, trading in your leased car, looking for another job, moving for a promotion, cutting your annual vacation. However, it’s necessary to consider every way in which you can make a significant change.
Begin Evaluating Every Option
Look at a list of all of your expenses and evaluate every line item. Begin by asking “why”. After evaluating what you money is being spent on specifically, ask why you are choosing to spend money on the items that you are. What are the alternatives? Even when alternative options seem far outside the realm of possibility, still include them. The purpose of this step is not to solve the problem, but to brainstorm every possible solution. Considering options that seem far from what you are willing to do (like trading your car for public transportation), give perspective and bring attention to the luxuries that you have in life.
Below are some examples of line item evaluations:
Car Payment: $650/month
Why am I spending money on this? Because I need transportation!
Why am I choosing my current option? Two cars are more convenient for our family and I’ve always wanted a BMW.
What are the alternatives? Sell it and have one car in the family, sell and buy a nicer car, sell and buy a less expensive car, sell and buy a used car, take public transportation.
How open am I to changing this (or do a scale of 1-10 on how important this is)?
If you were to change, what would be the monthly/yearly cost difference?
Eating Out: $400/month
Why am I spending money on this? Because we need to eat.
Why am I choosing my current option? We enjoy eating at restaurants and it’s convenient.
What are the alternatives? Eating out less, purchasing ready-made meals, personal chef, cooking all meals at home.
How open am I to changing this (or scale of 1-10)?
If I did make a change, what would be the monthly/yearly cost difference?
Begin to make decisions
After you have worked through your line item evaluations and identified what’s important to you, start making decisions.
As with so much in life, these decisions are not easy or clear cut. Every decision is a trade-off. What is right for one family is not going to be right for the next.
Remember to reflect back on why you are making these changes. It takes courage to make big decisions when your lifestyle has to change, but knowing why you are changing can make all the difference in the world.
If you find yourself unsure of your future and aren’t even sure if you need to cut back, I encourage you to consult with a financial advisor and begin the journey to achieving your financial goals.
“I have no idea how we did it back then,” a client couple commented on a copy of their budget from fifteen years prior. They laughed as they remembered their early struggles. They knew that their life had altered over the years, but hadn’t realized how much it had transformed financially.
The changes that take place over many years can be hard to identify as you go through daily life, but looking back over time, the changes can be shocking.
Most people see their incomes rise over the course of their working years, and as it does, that extra money is added to what they spend. With more money to spend, lifestyle spending creeps up.
Lifestyle creep happens over years. When you were younger, you might not have imagined eating fine dining on a regular basis, or having the ability to shop at Whole Foods or to take vacations. Your own children have grown accustomed to having the gifts and luxuries you never had growing up.
We don’t notice the innocuous changes and grow comfortable with the gradual adjustments. Because it’s not a sudden change, we don’t make conscious decisions about spending. It just happens.
Lifestyle creep is normal and expected in life, but looking at it from a financial perspective, there can be negative consequences if you don’t plan well for it.
How Lifestyle Creep Effects Your Financial Plan
You become inured to spending money
The danger here is that you may not even realize it. An increase in income means an increase in spending. What use to be unimaginable, becomes the norm.
Your perception of money changes
Spending $20 outside your budget may once have thrown your finances for a loop. Now, you don’t even blink at $20 spent here and there, and may spend even more than that without a second thought.
Your lifestyle changes
While you were once able to live comfortably on a certain amount, several years later, that amount has increased. You value the experiences and luxuries of the life you enjoy now. You didn’t know what you were missing before!
Not only has your lifestyle changed, your friends and social circles have changed. Social expectations may include dining at restaurants that would have never fit your budget before. You may feel (consciously or unconsciously) that in order to maintain those relationships, you have to maintain the spending.
Your retirement numbers change
This is the most important way that lifestyle creep affects people. For most, the goal of retirement is to maintain how you are currently living your life, or even increase the amount you live on; meaning that your income level will stay the same or higher.
As your lifestyle spending slowly rises, the amount you need in retirement will also rise. A small lifestyle change now has a dramatic effect on how much you’ll need in the future. As a basic example, for every $1,000 increase in your yearly spending, or $83 per month, you will need to have an additional $25,000 saved for your retirement years to sustain that lifestyle.
People feel compelled to save more money as they near retirement. Saving money is very important, but the biggest impact a couple can make on their retirement is to decrease their expenses.
Proactively Planning for Lifestyle Creep
Track spending and income
If you had a financial plan done in the past, be aware that your income and expenses are likely to have changed over the years. To keep current with the amount you need to be saving, track spending and income and revisit that financial plan often.
The most important element of a financial plan is the dollar amount that goes out every month. When that number changes, it is critical to let your financial planner know. Together you can determine an appropriate savings plan.
Many people intend to save their raises or bonuses. They plan on increasing their 401(k) contributions or putting extra money away for the children’s college fund or another financial goal. However, it’s far too easy to have good intentions and still miss implementing them.
Your expenses will always rise to your income unless you have a plan in place. A plan requires intentionality, energy and time. Frequently it’s on the to-do list, but can feel so enormous that it never gets done. Don’t let this happen!
Your first step is to realize how important this task is. These simple decisions to save or invest windfalls can be the defining point in your financial plan's success. Next, make the commitment to plan and take the time to put systems in place to make it easier to allocate that money. Set up an automatic investing plan or arrange to make extra payments on debt. Check into budgeting apps that help you save without thinking about it. Implementing these seemingly small steps throughout your life will yield big results.
Don’t let lifestyle creep wreck your retirement goals. Being conscious of your spending and having a plan in place will not only pay off financially, it will bring peace of mind as well.
In my freshman year of college I had to take the Clifton StrengthsFinder assessment. Two of my top five strengths were “Competition” and “Achiever.” Over the years I’ve had to come to terms with the blessings and curses of being a competitive overachiever.
“No matter how hard you tried, no matter how worthy your intentions, if you reached your goal but did not outperform your peers, the achievement feels hollow,” reads the description of the StrengthsFinder Competition Theme.
I have no doubt that my competitive nature helped me all throughout school. It served as a motivator when subjects seemed far from interesting and kept me focused on my education. But after I finished school and completed all my professional certifications, I was left with an emptiness. Without courses, I no longer had a yardstick to measure my success. There weren’t assignments and projects to overachieve on, there were no more “A”s to show or professors to tell me what a great job I had done.
I had to find a new way to compete and achieve. The obvious way to do this was to compare myself with those around me, my peers and friends, but I quickly realized how pointless that was.
Our Financial Perspectives
One of the incredible privileges I have in my career is getting an intimate look at other people’s finances, learning what is truly important to them and observing how they choose to live their lives.
I’ll never forget the conversation I had with one client couple. Their net worth was in the eight figures, and they lived well within their means. At the end of the meeting, they looked at me and said “We know we don’t have that much, but do you think we’ll be okay?”
At that moment I realized that, no matter how wealthy you are, there will always be someone who has more. Someone who has more money, a nicer house, a better education, a better career. Even people with lots of money feel this way.
I’ve worked with families who have far more money than I was raised with and people who have incredibly successful careers. I quickly realized that the happiest people were the ones who weren’t in a financial race. Yes, they had financial goals, but the goal wasn’t to simply make more money, the goal was rooted in a deeper value.
The happiest clients were the ones who knew what was important in their lives and pursued those values rather than simply valuing the accumulation of more money. They knew, accepted and weren’t bothered by the fact that there will always be someone out there with more money.
I’ve also seen people who were miserable in their careers despite making incredible salaries. Some would say they were winning at the comparison game, but losing at life.
Dangers in Financial Competition/Comparison
The very nature of competition is being aware of other people. But there is danger in judging your life by comparing it to other people’s.
It defines what you chase
It becomes far too easy to chase financial goals because you are trying to keep up with those around you, or worse, just because you want to beat someone. Jealousy, competition and keeping step with your social circles become the motivators instead of your core values.
It says where you're at isn’t good enough
Competition runs on the same premise as the advertising industry: that you need more. You need to be more successful and have more money and move faster through your career. Competition can easily sit at odds with contentment.
It defines happiness
Far too often, happiness is found in knowing that we are better off than others. A shallow sense of satisfaction is derived from knowing that when people visit our house, they will be impressed because it is nicer/bigger/better than theirs.
It breeds discontentment
The same is true when you don’t “win.” Comparison can breed discontent when you realize that your home will never compare with others, or that your career path with never result in a salary like your brother-in-law’s. Comparison shifts our focus from our lives to others.
Looking at Comparison in a Different Way
The best example I have of re-framing comparison is my mom. My mom has three daughters-in-law who are incredibly talented and amazing women. She has acknowledged that it would be easy for her to compare herself to them, to always try to play catch up with their beautifully decorated houses and various accomplishments.
One day, while talking with my mom, she said “I decided that instead of feeling insecure about my house not being as nicely decorated as theirs, I was going to be their biggest cheerleaders. I want to be the one leading the way in telling them how incredible they are and showing them off to the people I know.”
What a great perspective.
She continued by telling me how freeing it was when she made the decision to be their greatest supporter instead of subtly comparing herself with them.
How to Avoid the Hazards of Comparing
The first step in redefining the comparison game is to know what you value and the goals that you want to pursue. Know what is important to you.
The second step is to think differently about other’s successes. When you find yourself observing other people’s situations, instead of getting the emotional high or low, stop and think about what values the other person is holding to make those decisions. Are their lives or decisions ones that would fulfill your values? Are your motivations for living the life you have in line with your values?
The third step is to cheer others on. It doesn’t come natural at first, but when you see someone else's successes, be the one to applaud for them. Changing your mindset this way can be liberating and allows you to experience contentment and joy in seeing other’s successes.
I’ll leave you with a practical example of this. Several personal friends have been taking incredible vacations around the world. My husband and I were talking about this recently in light of our values. While we would certainly love to travel overseas, with limited vacation time and managing our budget, we realized that this couldn’t be and wasn’t our priority in life. We decided that instead of taking exotic trips overseas, we’ll be making more trips to South Dakota to visit family. Our values guide us to prioritizing our relationship and our future children’s relationship with their grandparents and extended family.
Yes, we would love to go on elaborate vacations, and we very well might do that someday, but letting our values dictate out choices has fostered contentment. We’re happy with the lives that we have chosen.
Hannah was asked to guest post on I Am That Lady. The following is the article that recently appeared.
It’s that time of year again.
Time for the onslaught of perfect holiday decorations, perfect family portraits and perfectly wrapped gifts under the tree. And we can’t forget those Christmas newsletters – is it even possible for people’s lives to be that perfect?!
And you’re stuck with your failed Pinterest projects and tight budget; the knot in your stomach growing as Christmas nears.
It’s holiday shame: the feeling of inadequacy that haunts us in the midst of the season’s celebrations.
Yet, we try to do it all anyway. Despite financial strains, we host our traditional holiday party for the neighborhood, buy extravagant gifts we can’t afford for the kids, and splurge on decorations in hopes of looking as festive as the best of those carefully staged homes on Instagram.
Famed researcher on shame, Brene Brown defines shame as “the intensely painful feeling that we are unworthy of love and belonging.”
Holidays are all about family, love and belonging, yet we try to appear to be what we think others want us to be to attain that love and belonging. We try to meet all those unspoken expectations of everyone around us, hiding the reality of our situations from those we want to impress, and even those we love.
We end up filled with holiday shame and find ourselves telling stories that make our situation seem acceptable to those we love, putting presents on credit cards because our kids shouldn’t be punished for our shortcomings and avoiding connecting with people, sometimes even in our own home. We hide our pain and struggles and tell ourselves it doesn’t hurt.
Why do we do this? Why all the smoke and mirrors?
Exposing our situation and ourselves is risky business. There is fear of rejection, fear that we will forever be labeled as that person. We’re afraid to be a disappointment to our friends and family and the last thing we want is their pity.
But with every risk, there’s the possibility of reward. What could possibly be worth that risk?
There is nothing greater at times like this than the joy and freedom of being loved exactly as you are. Honesty about our situations allows us to give what we can give. It lifts the weight of perfectionism and replaces it with freedom, a freedom that allows us to love ourselves, love others, and live life to the fullest. This in turn strengthens relationships and builds community.
In order overcome shame and allow ourselves to be loved, no matter what financial situation we’re in, it helps to be proactive. Here are some practical steps to help ease holiday shame.
Oftentimes, what we are able to do this year is different than what we were able to do last year. Communicating directly with your family or children about what you are and are not able to do takes away the awkwardness of unexpected surprises during holiday celebrations.
Practically, this could be sending an email to your family saying that this year, instead of a traditional store-bought gift for the family exchange, you are giving homemade gifts. Or it could mean telling your children that instead of buying things, you will be sharing an experience.
This allows you to create boundaries from the onset, creating an environment that allows you to not spend through guilt or shame.
Share Your Story
Shame flourishes in secrecy and silence. As you begin to tell your story, shame begins to lose its potency. Your story is powerful and your story matters!
Regardless of how much money my clients have, the most common sentiment I hear is “am I normal?” So many people go through life thinking no one could ever understand their lives. You are not alone. Give people you are close to the opportunity to hear your story and give them the gift of listening to their stories. It truly is one of the greatest gifts you can give someone.
Telling your story does not mean full disclosure to absolutely everyone. Use discretion and have healthy boundaries with who you are willing to share what with. However, I encourage you to push the boundaries with those you know who love you. I think you’ll find it’s worth it.
Have a Touchstone
A touchstone is something you have that reminds you why you are doing what you are doing. It’s a physical manifestation of something that’s important to you.
One of my touchstones is an envelope opener that sits on my desk. I was given this letter opener by a woman who believed that money and possessions are not the purpose of life. She exuded those values, and every time I use it, I think of her and who I aspire to be.
There will be times when giving in to the expectations of others would be so much easier than taking the hard route. Having something to physically touch will center you and remind you that you are trying to live intentionally, bringing you back to the purpose of it all.
Be Kind to Yourself
Lastly, be kind to yourself. We’re often our harshest critics. If we are to allow ourselves the freedom to be loved, we have to first be kind and love ourselves first.
Think of your closest friend. If they were to share a struggle or something that was close to their heart, how would you respond? Let that be the response you give yourself.
Letting yourself be seen and fully accepted by others is the greatest gift you can give yourself this Christmas. It is my deepest hope that you accept that gift this year.