Know Your Financial Baseline

In tennis the baseline is the edge of the court. Being aware of the limitation of the playing area is a skill that for a seasoned tennis player will become a natural instinct. They will know how to hit the ball to keep it in play and also they will 'feel' when they have hit it out of play.

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This visceral knowing comes from the practice of the sport: a concerted effort towards perfecting your craft as a tennis player comes not only from keeping your body in tip-top shape but also from mastering the court.

In the same way, mastering your finances not only requires mastering the generation of income but also in being fully cognisant of the way in which that money is spent. The spending of money in this scenario is the tennis court. To continue this scenario, a financial baseline is the least amount of money you need to furnish your needs on a monthly basis.

This number represents what you would keep paying if you found yourself in a reduced income situation and needed to drastically cut expenses. This number is derived by looking at your current list of obligations and highlighting which bills and activities you would maintain even if you found yourself in the worse case scenario.

For a starter a baseline would include housing and the associated utilities, food, transportation and a cell phone or the internet for communication. Maintaining other things such as health and life insurance would be additional on top of this. If possible making minimum payments on debt would also be considered part of your baseline costs, as you would want to do whatever possible to stop those obligations from going into collections. 

Knowing your baseline helps you to make gauge your how much risk you can tolerate when making investments. It also helps you to plan for retirement, as you would have a good idea of how much money you would need to comfortably maintain your current life style. 

It is also key when looking at how much of your income you are utilizing. This percentage ideally would be low enough that you can comfortably meet your living needs and still have plenty left over for your wants and to put into savings, investments and retirement vehicles.

Even if your financial situation is not ideal and knowing this information can assist you to avoid taking on any-more than you can handle. It can also pave the way to turning around your current situation; awareness is the first step in implementing lasting change.

Our consumerist society driven by mass media marketing encourages the individual to get whatever they want immediately and promises that the problems that they are facing (depression, low self-esteem etc) will be solved by purchasing the items being advertised. These false promises often lead people into living a lifestyle which is propped up by debt. Knowing your baseline is your first protection against such a trap, as you become acutely aware of your own financial situation and how such purchases will effect your ability to maintain a healthy balance.

The key to a life free of money worries to keep your ball active at all times, even if you chose to sometimes take a risky shot, you do so knowing how you will recover from any potential double faults. 

Too many people try to constantly increase their income without learning to master the court; which is akin to a tennis player spending a lot of time in gym but not enough time actually playing. While the tennis player is stronger and can now hit the ball farther, their skill in playing the game has only marginally improved.

In finances this type of thinking leads to dead-end as one begin to realise the truth in the adage more money, more problems or succinctly: the more you earn, the more you spend. In order to keep yourself from falling into this trap one must keep your baseline from exploding as your income increases, and when your income decreases, drop your baseline accordingly so that you always maintain a level of breathing room. 

To  put it in a different way, you can win at the game of personal finance by keeping your ball well within the confines of the tennis court. Overtime as you practice it will become second nature and you begin enjoy the victories that will ensue as you master the ratio between your income and your obligations. You will then be able to fully enjoy the abundance that you have left over after your have satisfied the balance between the two.

Game. Set. Match.

Raphael Nadal

A Morning Routine

I have spoken before about habits and how they can change your quality of life. This post is to further that discussion somewhat. I have found that when I string certain habits together the result is powerful chain of healthy activity that leaves me feeling grounded and ready to take on the day.

A morning routine is a series of actions that you decide to adopt as part of your schedule. It often begins upon waking and will carry you through until you are ready to transition into your first major task of the day. This routine can consist of almost anything, and I will list some of the typical habits you can put together to create your own morning routine a little later.

For now I will speak of the most important part of any morning routine: Sleep. In order to ensure that you have enough time to implement any habits upon waking, you need to have gone to bed at a time which allows you to get enough sleep so that you can get up early.

This is a greater challenge than it may seem as many of us struggle with poor bedtime habits, and so falling to sleep very difficult. This difficulty translates into poor rest, and often we wake up grumpy at the behest of an alarm or a loved one, wishing we didn't have to get out of bed.

In order to make sure that you can flow seamlessly from sleep to wakefulness it is important to get to bed at a reasonable time, and turn off any distractions such as the cell phone, tablet, laptop or television and fully prepare for sleep.

Once you have set yourself up with a sleeping habit that you can rely on, you then can decide on how you would like you morning to start. Your routine may be only thirty minutes or you may want an hour to yourself before you let the rest of the world in. The key is to try different habits that appeal to you and adjust the timing where necessary until you are satisfied with the outcome.

The point of a morning routine is to put you both in a mental and physical state which helps you have a productive and balanced day. How we start out can decide how we continue and ultimately how we finish. Carving out time for yourself in the morning will ensure that you never 'wake up on the wrong side the bed' and stay there.

Now that my mornings are structured, the rest of my day feels off balanced when I don't do all or any of my key habits.  I look forward to the feeling that I have already achieved a great deal. Checking off various activities on my list, is an instant boost and that momentum rolls forward into my other tasks for the day.

If you feel off-balanced or rushed in the morning, consider cobbling together a routine for yourself and seeing if it helps you to feel more a peace.

Now here is that list I promised you:

• Meditation
• Yoga/Stretching
• Exercise
• Journalling
• Walking or Running
• Drinking a Cup or Tea/Coffee
• Making the Bed
• Reading
• Writing a To-Do-List
• Setting Intentions
• Prayer 
• Reflection
• Gratitude
• Visualisation
• Affirmations
• Mirror Work
• Drawing
• Knitting/Handicraft
• Connecting with a loved one
• Playing with pets
• Tending your Garden
• Cooking/Baking
• Having breakfast
• Lighting Candles/Incense

How much should you spend on Vacation?

There is no hard and fast rule on how much money you should spend on vacation in my book; the only rule concerning vacations is that you should take them as often as you need them.

I use my vacation category for day-trips, workshops and short stay-cations, all of which help me to rest and rejuvenate my energy. A vacation doesn't always have to entail travel to a far away place, the whole point of it is to allow yourself time to be grounded and unwind.

In this regard, the importance of vacation cannot be understated, and therefore funding a vacation category even when you are in debt should come under your necessities. See my point above that it need not be a trip to Paris to constitute a vacation.

Some financial gurus are against this, seeing vacations as a 'treat' that you can easily defer until you have gotten yourself out of debt. This mentality worries me, because it makes it seem as if you were terribly naughty to get yourself into debt and now must undertake a period of penance before you are allowed to 'enjoy' life again.

While I acknowledge that taking frequent trips is why some people are in so much consumer debt, and that there needs to be a measure of self-control added to that equation to halt the creation of more debt; it is detrimental to the mind and body, not to specifically set aside some of your time and your energy (both physical and monetary) to giving yourself space to recharge.

If you are carrying a lot of debt, I would recommend keeping your vacation to 5% of your Net Salary where possible and doing short weekend getaways or day trips.

If you are not carrying any debt then you can fund your vacation category at 10-15% as a good starting average.

If however travel is an extremely important part of your life, you may raise this percentage much higher to allow for more frequent trips. On the other hand if you are quite happy with short day trips or spending family time camping, you may be able to reduce this percentage.

When I apply the 10-15% rule to my net salary, it works out to between 2600 and 4044. This is more than enough money to both take a staycation or two and a modest trip overseas to visit family or close friends. If I want to do a trip to Paris however, it would require saving a bit more on top of this, or making it my only trip that year.

For some their work involves a lot of travel and so they seldom find that relaxing. Simply unwinding at home is an invaluable experience for them.

I have often heard the adage if you need a vacation form your work, you're in the wrong field. While this has some merit, even when I am doing work that I love, I need time away from it to honour the natural ebb and flow of my motivation and creativity.

If you are self-employed you often work harder for yourself than most wage-earners, and so I dare say that setting up a period of downtime for yourself is crucial to maintaining a high level of overall mental health. Set up you vacation well in advance, taking into account any tasks you need to delegate in order to make sure that your business does not suffer from your absence. You may need to save more for vacation as you may not be earning your full wage while you are on the break, and it is important to factor in any loss of revenue into your plans.

This need to account for the loss of revenue is also necessary if  you do not have a paid vacation and will need to cover your expenses as well as foot the bill for whatever trip you have planned.

In all scenarios careful planning can assist you in having a fabulous trip within the budget that you have set out.

When making  vacation budget it may be helpful to look back on your past trips and break down the various costs under headings such as airfare, accommodation, food, activities and general spending. Once you have these figures this will allow you to produce a reasonable savings goal for your next trip.

Whatever you decide will be your next getaway, start planning today and you will be able to reap the benefits without any financial fallout.

The Power of Reflection

Reflection is the practice is looking back on a period of time in your life and giving it serious consideration. You look at the situation from several different angles, asking yourself key questions to decide if you are fully satisfied with the outcome.

Once you have discerned your level of satisfaction you can then make key step in taking a new direction in your life; reflection empowers you to make positive changes based on solid information.

Sitting with yourself is difficult because it requires you to rehash some unpleasant events. Disappointments or failures may be as bitter a pill to swallow as they were the first time you experienced them, however, as is the usual way of being human, we tend to remember events as more dramatic than they have been.

Often an argument with a friend in which I may have felt quite justified at the time, can suddenly seem terribly petty when I honestly evaluate both sides of the story.

 Reflection proves time and time again to be an invaluable tool for seeing past events in an unbiased manner.

Additionally, when we review a month or a quarter of the year our summation of the events is often heavily influenced by what can most readily be remembered. Other lesser, but perhaps even more meaningful events are eclipsed by the more emotionally charged experiences. Careful consideration can being this back to balance.

Further, it is far too easy to lean either to the extremes of blaming everyone for your misfortunes or harshly criticizing yourself for your mistakes.

Building up the practice of reflection allows one to break an incident down to the bare bones and when you are able to see the cause and effect of each action you can then have each party or event carry its true weight.

It is prudent to note that the point of reflection is not always to make a change. In some cases reflection leads you to the conclusion that everything is working fine and that you can keep it as is. This is an equally important thing to know, as you can give yourself a much needed 'pat on the back' for the good job that you have been doing.

I apply the habit of reflection in five main areas of my life: Finances, Work, Relationships, Personal Growth and Spirituality.

The questions I ask myself in each situation are not the same but the underlying answer I am hoping to get is that I am contented with how I am doing in each area or that I  have a plan on how to reach that contentment which is unfolding.

For each person the process will be different. I will try to get you started by listing some questions that have helped me to get down to the root of the issue:

• What went right today (this month etc) ?
• How would I rate this event from 1-10?
• What am I responsible for in this situation?
• How can I improve in this skill (area)?
• If I had a chance to do it again, what would I change?
• Am I feeling fulfilled?
• Have I given the best of myself?
• I am being fair to him or her?
• If I put myself in the other person's shoes, what would I have done?
• Did I achieve what I set out to do?
• What is my tolerance for setbacks and obstacles?
• What can I learn from this event (person)?
• Am I happy with how I am spending my time (money, resources)?
• Is this situation adding to me or draining me?
• What can I do to make me feel more empowered and less swept up in the tide?
• Did my planning work out, or did I miss a key step?
• What is no longer serving my purpose?
• How did I not show up for myself in this situation?
• Why did I end up feeling overwhelmed (bored, out of energy etc)?
• Who do I need to thank for their help?
• What things can I be grateful for?
• What skills did I use to help resolve this situation?

Here are a few habits that pair well with reflection and on their own can help you to shift your life into a better place. Used together, they create a formidable tool box of self-mastery:

1) Journalling

This is a useful form of not only clearing the clutter from your mind, but also in helping you to organize your thoughts and put together plans. It is an essential stage in turning dreams into reality. Journalling helps with reflection by providing data to be analysed; this is invaluable as we often forget nuances of an event and journalling can help in that area.

2) Meditation

Meditation can help you to clear your mind and allow your thoughts to settle themselves. I have found that some of my best ideas have come to me after a period of meditation. The quietness of my mind afterwards allows me to be able to put aside excess emotion and view things in an unbiased way. 

3) Planner or Diary

Keeping a planner or diary is great for keeping you organized. It will also provide a form of record keeping of what happened over the course of the week or time period under review. It will be even more useful if you update the planner with what actually occurred in a day, versus what had been the plan.
You will be able to notice what appointments ran over time and where you can allow increased flexibility in the future. You can also notice if you need to schedule time for self-care and rest.

4)To-Do Lists

Most people do a to-do list and then throw it away. However keeping your to-do lists will help you to see what tasks you are simply moving forward and which ones you do in a timely manner.
Making a to-do list can keep you from feeling lost in the middle of the day when you have a lot to do, but no clear idea on how to get started. 

5) Gratitude Round-Up

Taking time out to note what you are grateful for can lift your mood. Often we lose sight of the things that we have now that enrich our life, and also of the people around us who offer constant support and love.
This practice is especially excellent at the end of a monthly review; I feel very abundant when I look back on all of the great things that happened me and the ways that my loved ones made me feel special.


Lastly, if you make a habit of starting your day by setting out the most important task you need to get done and making sure that you do it,  a brief reflection on how that task unfolded at the end of the day will do wonders in improving your productivity over time.

Reflection is no quick fix to the problems of sustaining motivation, but gradually it can transform several key areas of your life.