New Report on the Cost of Kids: Reading Between the Lines

The U.S. Department of Agriculture (USDA) recently released its annual “Cost of Raising a Child” report. The news from it is really no news at all to us parents—kids are stinking expensive and growing even more so. However, if you read between the lines, there are three extremely important points that don’t show up in the executive summary:

My family outside of the South Carolina Aquarium in Charleston

1)   Parents still have a choice. The USDA estimates that households with less than $61,530 in income will spend a total of $176,550 per child. Meanwhile, “middle-income parents” making between $61,530 and $106,540 each year can anticipate spending $245,340 per kid. Those blessed with household income over $106,540 should expect to spend $407,820. 

Here’s how I read these numbers: It likely costs approximately $175,000 to care for a child’s needs in today’s dollars. Beyond that, it’s our choice as parents if and how we spend additional money on our progeny. When your household income jumps from $106,000 to $107,000, the USDA isn’t holding a gun to your head and demanding that you spend an additional $162,480 per child.

It’s completely up to you, and you may choose to spend more or less than some of the USDA estimates. For example, you may choose (wisely) to spend more on one child than another for various, justifiable reasons, including each individual child’s own gifts and weaknesses. If you choose to put even one child through private school, from kindergarten through a graduate degree, you could easily spend a million bucks just for education—and college isn’t even included in the USDA’s numbers.

It’s not how much you spend but how you spend it—and whether you can afford it—that’s important.

2)   It’s important to introduce children to the realities of money early. The cost of being parents shouldn’t be a taboo topic with our children. In fact, children should be introduced to the reality of money and the cost of living as early as they can comprehend it.

As they age, we should give our children more and more information and put more control in their hands. Money was—and still is for many—a taboo topic, and that needs to change. I’m not suggesting you share everything about your financial world with your kids. But find a way to help them understand that they are their own ecosystem, albeit one that resides within your family.

I recently discussed this topic on the Nightly Business Report.

3)   Couples who avoid this topic do so at their peril. More than 50% of marriages end in divorce and more than 50% of those couples list financial disagreements as the primary reason for their breakup. The emotionally charged decisions we make, and specifically those decisions related to our children, provide the perfect context for serious disagreement. So, if you want to give your marriage a sporting chance, openly discuss and specifically plan for child-related expenses.

I’ll never forget having coffee with a mentor of mine about 11 years ago and discussing this topic. On a personal level, my wife and I were ready to begin a family, but as a financial planner, I didn’t feel like we were prepared.

“You’ll never feel like you’re ready,” my mentor told me. “No matter when you decide to do this, it will be a leap of faith.” Our boys, Kieran and Connor, just started the fifth and third grades, respectively, and I must say I’m forever grateful that I followed the advice of my mentor.

Choosing to start a family is about a great deal more than financial readiness and planning, but your marriage and your children will be better for it.

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The Top 10 Places Your Next Dollar Should Go

Originally in ForbesThere is no shortage of receptacles clamoring for your money each day. No matter how much money you have or make, it could never keep up with all the seemingly urgent invitations to part with it.

TOP 10 DOLLAR

Separating true financial priorities from flash impulses is an increasing challenge, even when you’re trying to do the right thing with your moola — like saving for the future, insuring against catastrophic risks and otherwise improving your financial standing. And while every individual and household is in some way unique, the following list of financial priorities for your next available dollar is a reliable guide for most.

Once you’ve spent the money necessary to cover your fixed and variable living expenses (and yes, I realize that’s no easy task for many) consider spending your additional dollars in this order:

  1. Create (or update) your estate planning documents. Your estate planning, or lack thereof, is unlikely to make headlines like that of the rich and famous. But the frightening implications of not planning for your inevitable demise lands it in the top financial priority slot, especially for parents of minor children. With extremely rare exceptions, every independent adult should have the following three documents drafted, preferably, by an estate planning attorney: a will, durable powers of attorney and advance directives (health care power of attorney and a living will).
  2. Ensure that insurance needs are met. Don’t become the next heart-wrenching 20/20 segment because your family was left destitute after you died or became disabled without adequate insurance for such catastrophic events. Please note, however, the difference between insurance needs and wants. Surprisingly, most insurance needs — especially regarding life insurance— are sufficiently covered with policies that are less expensive than the all-inclusive, bell-and-whistle products often recommended by insurance agents.
  3. Pay off any high-interest consumer debt. It’s hard to build assets when you’re dragged down by liabilities. A new report out from the Urban Institute indicates that one-in-three Americans have debt in collections — you know, that’s when you get nasty calls from unforgiving call centers that purchased your debt for pennies on the dollar from credit card companies and medical care providers, among others. That’s roughly 77 million people! The economic and emotional toll of consumer debt, especially at astronomical rates, makes it financial enemy number one (or, in this case, number three).
  4. Build at least one month’s worth of living expenses in emergency savings. Savings is the first line of defense against cancerous consumer debt. Yes, of course I’d like you to have more than a month saved, but the next priority is just too good to put off …
  5. Earn free money by taking advantage of your company’s 401(k) match. Many companies offer to incentivize employee retirement savings by matching, up to a certain amount, the percentage of your salary that you contribute to the company retirement plan. They may match 100% of the first 3% of your salary that you elect to save, or 50% of the first 6%. In any case, give yourself a guaranteed rate of return by gobbling up those matching contributions from your employer. If not, you’re leaving money on the table.
  6. Contribute to a 529 plan for education savings. Education should not be prioritized over retirement, and merely contributing the matched amount to your 401(k) is not likely to secure your future retirement. But once you have checked off numbers one through five, it’s time to consider opening up 529 accounts for children you intend to help through college. Contribute what you can and invite loving relatives to do the same.
  7. Contribute the maximum possible to your Roth IRA(s) if your income level allows you to. Nothing’s better than free money, but tax-free money comes close. By contributing to a Roth IRA, you’re filling a bucket of money that should never be taxed (as long as you wait until after age 59.5 to take gains). And, if you are hit with an emergency that runs through your reserves, you can take your principal contributions back out of your Roth IRA at any age for any reason without taxes or penalties. In 2014, you can contribute $5,500 per person or $6,500 per if you’re age 50 or older. The ability to contribute to a Roth IRA goes away entirely, however, if your income level is above $191,000 in 2014.
  8. Return to strengthen your emergency reserves. If you really want to sleep well at night, I like to see most households with stable jobs amass three months of reserves, households with more volatile income sources put away six months of savings and the self-employed stockpile a year’s worth of expenses.
  9. Come back to your 401(k) and cap it off. If you still have money left after taking advantage of numbers one through eight, you probably have a fairly high income. Maxing out your 401(k) or other corporate retirement plan will not only further pad your retirement savings, but will also reduce your taxable income for every dollar contributed. You may contribute up to $17,500 per person — and a whopping $23,000 for investors 50 or older — in 2014.
  10. Set aside excess savings in a liquid, taxable investment account for mid-term needs and projects. Emergency savings helps protect you in the short-term. 401(k) and Roth IRA investments help secure your financial future. But if you’re only taking care of the short- and long-term, it leaves nothing for the mid-term. Therefore, opening a regular, taxable investment account will help you set aside money for a boat, excess education costs, a closely held business investment or the down payment on a second home or a rental property. This money should be invested in accordance with the time horizon for its use.

Conspicuously missing from this list are non-deductible Traditional IRAs, annuities, all forms of permanent life insurance and hundreds of other marketed repositories for your money. These products have their uses, but they simply don’t take priority over these ten financial initiatives. In all, I estimate the “cost” of checking off each of the listed priorities to be more than $70,000 annually, surely requiring combined household income of $250,000 or more. That means you can likely free yourself from worrying about any of the additional pitches that come your way until you’ve mastered each of these.

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you'd like to receive my weekly post via email, click HERE.

Make Your Career Move An Easy Job

 

Originally published CNBCYou know what has to be done, but it doesn't make it any easier. You've done all the research, asked all the questions and mulled over your options, and you know that moving on from your current company is the right thing to do.

 

interview6

You wince, imagining the look on the face of your boss and co-workers when you tell them. You're no longer an insider, but an outsider or—worse—a competitor. Even your relationship as friends could be compromised. It's stressful for everyone, but especially for you because ultimately it's your choice.

As you go through your morning routine on the day you're delivering the news to your company, every step seems more pronounced than it typically does. Maybe it's because you recognize it could be the last time you'll go through the paces exactly like this. Or maybe it's because the adrenaline has already notched up in anticipation of the discussions you're about to have with your boss and colleagues.

Indeed, along with marriage, divorce, death and personal injury, changing jobs is consistently ranked as one of the most stressful things a person can do. That stress can be substantially reduced, however, if you're better prepared for what comes next. Here are three ways to make the most of your job transition:

1. Leave well. "It's more important to leave well than it is to start well," a good friend once told me. And it's true. You've already made a good impression on your new company—you got the job! But while you're heading on to new and exciting adventures, your former employer is left to deal with the rejection and cleanup from your departure.

Make it easier by offering to stay on for a reasonable period of time, but not longer. In most cases, shorter is better for all parties, as it reduces the awkwardness and hastens the healing.

Part of leaving well is preparing to deal with impulsive counterattacks mounted consciously or unconsciously by your former co-workers. Especially if you brought or maintained client relationships, the words "I'm leaving" may magically transform you from friend to foe—but let that be their choice, not yours. Take the high road whenever possible.

2. Don't leave anything behind. Along with your personal Swingline stapler and the letter opener your parents gave you, don't leave your 401(k) or any other transferable benefits behind.

Specifically regarding your 401(k) or other comparable plan, you typically have three options, depending on the design of the plan you're leaving and the plan your new company offers. The first option is to leave it there; I rarely recommend this unless you're in love with the plan investment options and pay close attention to them.

Option two is to transfer the old 401(k) into the new plan, if they allow it. This gives you the benefits of consolidation and, while rarely advisable, the ability to borrow from your plan—a provision not available in old retirement plans or IRAs.

For most, the sensible choice is to aggregate the newly antiquated 401(k) plan with other prior plans in the form of a direct rollover to an IRA. In this case, you are not limited to the investment options in the new 401(k)—options that are notoriously mediocre. Be certain to check all the right boxes to ensure that your rollover is not a taxable event.

It's also important to take stock of any company benefits that are transferable. Although they are nearly extinct, pension plans of various sorts accrued during your tenure may do nothing for you now but could be meaningful in the future.

One client recently had a premonition that she'd left a small pension behind from a previous job. I encouraged her to call the company's human resources department, and indeed, there was $9,000 sitting in a plan earning 3 percent per year that she can't touch for another 15 years.

If you're blessed enough to have annual income in excess of your saving and spending needs, you may have a qualified or non-qualified deferred compensation plan to handle. And while also rare, there are occasions in which group benefits—such as life, disability income or long-term care insurance through your company—can also be traversed to private policies with the vendor.

3. Make the most of your fresh start. Nobody's perfect—including you. But as the saintly image of yourself you've been promoting to your new company starts to settle into something closer to reality, you do have an opportunity to trade some bad habits for good ones.

Take advantage of this clean slate by embracing the time-management method that's worked so well for your friend, or finally start using a system to seize control of your email inbox.

Develop a healthier rhythm of life and work. Be careful not to overextend yourself at the beginning of the new gig, lest you set expectations you'll never be able to live up to.

Make wise choices with your new benefits package. Increase your 401(k) contribution to the level you know you should be saving, and put sufficient time into really understanding the new investment options and determining the optimal mix for you. Don't forget to add beneficiaries to your new 401(k) plan and any group life-insurance coverage in the new benefits package.

As you review your group benefits—especially health, life and long-term disability-income insurance—be sure to actually understand them and acknowledge whether or not you should be supplementing them privately. (You can be almost sure that the base level of free life and disability-income insurance is insufficient.)

Consider opening your mind to a high-deductible health plan, which gives you the option to utilize a Health Savings Account (HSA). Many assume this is too complicated or costly, especially if you have a young family, but even in that case, this can be a great way to make nearly all of your household medical expenses tax deductible.

While certainly stressful, a job change navigated well can be an amazing personal and professional launchpad—especially when you leave on good terms, don't leave anything behind and take full advantage of the fresh start.

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you'd like to receive my weekly post via email, click HERE.

Tim Maurer, a certified financial planner, is director of personal finance at the BAM Alliance and an adjunct faculty member at Towson University. He has co-written two books with best-selling author Jim Stovall. Their most recent release is "The Ultimate Financial Plan: Balancing Your Money and Life." 

 

What You Can Learn From Bill Gross And PIMCO’s Troubles

Originally in Forbes“Trouble. Trouble, trouble, trouble, trouble.” Reading all the news about Bill Gross and PIMCO, I keep hearing that Ray LaMontagne song in my head. (Go ahead—give it a listen while you read this, just for fun.)

The king of bonds isn’t yet abdicating the throne, but it’s been a rough stretch since PIMCO came down from the mountain to translate the etchings on the “New Normal” tablets. It was, of course, hard to argue the logic in 2009, that U.S. markets would struggle under the weight of a sluggish economy hampered by high unemployment and systemic government debt. But as it often does in the face of supposed certainty, the market defied man’s expectations.

EGO

Time Is More Precious Than Money

As the Fed has taught us through the money-printing machine cloaked as quantitative easing, the potential supply of U.S. dollars is limitless. Even for most of us individually, we are capable, to varying degrees, of generating and regenerating money through work, investment and happenstance.

Time, however, is a different story.

Thanks to Emily Rooney for permission to feature her artwork

Thanks to Emily Rooney for permission to feature her artwork

It brings to mind these lyrics: “Where you invest your love, you invest your life,” croons Marcus Mumford in the song “Awake My Soul” on Mumford & Sons’ debut album, “Sigh No More.”

Sure, musicians are notorious for writing lyrics because they sound self-important, or maybe simply because they rhyme, but Mumford has earned a reputation for lyrical brilliance and offers us something deep and meaningful here to apply in our lives and finances.

No matter how much we strive, delegate and engineer for efficiency, there are only 24 hours in each day. We are unable to manufacture more time, and once a moment has passed, it is beyond retrieval.

Of these 24 hours each day, if we assume that we will sleep, work and commute for approximately 17 of them, that leaves us with a measly seven hours to apply ourselves to loftier pursuits. After an hour at the gym, an hour to eat and another hour to decompress with a book or TV show, we’re down to four hours to personally affect those for whom we are presumably working and staying healthy—the people we love.

Our human capacity to love also has its limits.

While not measurable, we can all acknowledge that our capacity to love, in the four hours each day that we have to invest it, is affected by how we’ve invested the other 20 hours. By the “end” of many days, we are just beginning our four hours, and we are already spent. Even if we wanted to, we have nothing left to give—no love left to invest.

I am a chief offender of misallocating my love.

I often allow the four hours I have to give to my wife, Andrea, and two boys, Kieran (10) and Connor (8), to shrink to three, two or even one. In whatever time is allocated, I often serve leftover love, having over-invested myself throughout the day. Then I steal from their time, interrupting it with “important” emails and calls.

I must acknowledge that these are choices I make.

We have the choice to order our loves, to acknowledge the limited nature of time and our own capacity, and to prioritize our work and life.

It’s entirely appropriate to love our work and the people we serve through it. It’s entirely appropriate to love ourselves and to do what is necessary to be physically, fiscally, psychologically and spiritually healthy. It’s entirely appropriate to love our areas of service and civic duty, and to serve well. Therefore, almost paradoxically, it’s entirely appropriate to spend 83 percent of our daily allotment of time in pursuits other than the direct edification of those we love the most.

But what would our lives look like if we engineered our days to make the very most of the other four hours?

Would we have a different job? Would we live in a different house or part of the country? Would we drive a different car? Would we say “no” to some people more and to other people less? Would we invest our time and money differently?

Would you invest your love differently?

I’m excited to be part of a contingent of financial advisors asking these questions of our clients (and ourselves).  We don’t believe that the only way to benefit our clients is through their portfolios, and we believe that asset allocation involves more than mere securities.

This isn’t a particularly new concept.  Indeed, the second phase of the six-step financial planning process, as articulated in the Certified Financial Planner™ (CFP®) practice standards, is to “determine a client’s personal and financial goals, needs and priorities.”  But thought leaders like Rick Kahler, Ted Klontz, Carol Anderson, George Kinder, Carl Richards and Larry Swedroe are persistently nudging the notoriously left-brained financial realm to reconcile with its creative and intuitive side for the benefit of our clients.

With statistics suggesting that as many as 80% of financial planning recommendations are not implemented by clients, it’s officially time to recognize that personal finance is more personal than it is finance.

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you'd like to receive my weekly post via email, click HERE.

Study Reveals Investing Is Hazardous To Your Health

Investing Hazard-01I don’t need to inform you that investing is dangerous business.  You already know in your gut what Joseph Engelberg and Christopher Parsons at U.C. San Diego found in their new study, that there is a noticeable correlation between market gyrations and our mental and physical health.

But when do you think the financial industry will get the point?

Shortly after I became a financial advisor, I was given a book to commit to memory.  It told me what my role in life would be: To make a very good living helping approximately 250 families stay in the stock market.

The text insisted that regardless of my client’s age or risk temperament, it would be in their best interest to be—and stay—in stocks, exclusively and forevermore.  I was the doctor; they were the patients.  I was the ark-builder; they were the—you get the point.

The book might even be right.

But…

The Behavior Gap

My friend and New York Times contributor, Carl Richards, has been drawing a particular picture for years.  He’s struck by the research acknowledging the noticeable difference between investment rates of return and what investors actually make in the markets.  (Investors make materially less.)

Investors, it appears, allow emotions to drive their investing decisions.  A desire to make more money causes them to choose aggressive portfolios when times are good, but a gripping fear leads them to abandon the cause in down markets, missing the next upward cycle.

Investors buy high and sell low.

Well-meaning advisors, then, including the author of the book I referenced, have claimed their collective calling to be the buffer between their clients’ money and their emotions.  Unfortunately, it’s not working.

Maybe it’s because the intangible elements of life are so tightly woven into the tangible that we can’t optimally segregate them.

Maybe it’s because we’re not actually supposed to forcibly detach our emotions from our rational thought.

Maybe it’s because financial advisors and investing gurus should focus less on blowing the doors off the benchmark du jour and more on generating solid long-term gains from portfolios designed to be lived with.

Livable portfolios.

Portfolios designed to help clients stay in the game.

Portfolios designed to help clients (and advisors) avoid falling prey to the behavior gap.

Portfolios calibrated with a higher emphasis on capital preservation.

How much less money do you make, anyway, when you dial up a portfolio’s conservatism?

The Same Return With Less Risk

In his book, How to Think, Act, and Invest Like Warren Buffett, index-investing aficionado, Larry Swedroe, writes, “Instead of trying to increase returns without proportionally increasing risk, we can try to achieve the same return while lowering the risk of the portfolio.”

Using indexing data from 1975 to 2011, Swedroe begins with a standard 60/40 model—60% S&P 500 Index and 40% Five-Year Treasury Notes.  It has an annualized rate of return of 10.6% over that stretch and a standard deviation (a measurement of volatility—portfolio ups and downs.) of 10.8%.

Next, Swedroe begins stealing from the S&P 500 slice of the pie to diversify the portfolio with a bias toward small cap, value and international exposure (with a pinch of commodities).  The annualized return is boosted to 12.1% while the standard deviation rises proportionately less, to 11.2%.  (Remember, this is still a 60/40 portfolio with 40% in five-year treasuries.)

But here’s where Swedroe pulls the rabbit out of the hat:  He re-engineers the portfolio, flipping to a 40/60 portfolio, proportionately reducing all of his equity allocations and boosting his T-notes to 60% of the portfolio.  The net result is a portfolio with a 10.9% annualized rate of return—slightly higher than the original 60/40 portfolio—with a drastically lower standard deviation of 7.9%

Same return.  Less Risk.

This, of course, is all hypothetical.  This happened in the past, and for many reasons, it may not happen again.  These illustrations are not a recommended course of action for you or your advisor, but instead a demonstration that it is possible—and worth the effort—to work to this end.

Because we can’t keep hiding from the following logical thread:

1)   Volatile markets increase investor stress (even to the point of physical illness).

2)   Heightened investor stress leads to bad decisions—by both investors and advisors—that reduce investor returns.

3)   Market analysis suggests that portfolios can be engineered to maintain healthy long-term gains, while at the same time dramatically reducing the intensity of market gyrations.

How could we not, then, conclude that more investors would suffer less stress, thereby reducing (hopefully eliminating) their behavior gap, thereby allowing investors to hold on to more of their returns?

Isn’t that the point?

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you'd like to receive my weekly post via email, click HERE.

Top 5 Posts of 2013

Top Blog Posts of 2013-01One of the great blessings of my career—heck, my life—is the opportunity I’ve had to communicate through the written word.  Thank YOU for reading my work.

In 2011, my bucket list daydream of having a book published came true; then in 2012, I began actively contributing to Forbes.com, for which I write a weekly blog post.

I enjoy the creative process enough that if only one person read a post, article or book that I wrote—and benefited from it—that would be reward enough for me.  The pleasant surprise of 2013, though, was that far more people read and responded to my work than I ever could have imagined.

Even more of a shock, however, was the subject matter of the posts that became popular and garnered the most attention.  I’m a financial planner who writes about the intersection of money and life, but my most viewed posts definitely skewed toward the life part of that equation.

In case you missed any of them, here are the top 5 most viewed posts of 2013:

5. Haiti Doesn’t Need Our Help (Forbes.com) — Though it only ranks fifth in views, I think this would be my personal favorite—and most important—post of 2013.

4. 10 Days Is the Magic Vacation Number. Here’s Why (Lifehacker.com) — This post was initially published on my Forbes blog, but Lifehacker republished it (with permission), where it racked up an even higher number of views.

3. Two Reasons Why Copying People Won’t Make You Successful (Forbes.com) — On this most recent post within the top five, I got to work with two of my favorite “success authors,” Michael Hyatt and Laura Vanderkam. We discussed why the path to success isn’t necessarily found following someone else’s footsteps.

2. What you don’t know about Social Security can hurt your retirement (CNBC.com) — I’ve had the privilege of working with CNBC for several years on video projects, but this article was my first contribution on the written front.  I’m looking forward to more of these in 2014.

1. 7 Reasons I Dumped Facebook (Yahoo! Finance) — I’m still dumbfounded by the popularity of this post.  Yes, I decided to quit Facebook and hesitantly chose to write about why.  Apparently, this sentiment happened to hit the online airwaves at just the right time, because after getting more views than anything else I’ve ever written for Forbes.com, it was picked up by Yahoo! Finance and went viral on their site. Crazy.

I’m really looking forward to 2014, excited about the opportunity to bring money to life—and life to money—in writing.  I’m soaking up wisdom from the Forbes editorial staff, have two new book projects in the works and was humbled by CNBC’s invitation to join their inaugural group of 20 financial advisors making up the CNBC Digital Financial Advisor Council.

But I’d love to hear what YOU want to read more of in 2014.  Please shoot me an email at tim[at]timmaurer[dot com] with your thoughts.  (Yes, I know email address is not “spelled” correctly; it’s so robo-spammers don’t snag my email address.)

THANKS AGAIN, AND HAPPY NEW YEAR!

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you'd like to receive my weekly post via email, click HERE.

20 Lessons We Can Learn From 20-Year-Olds

20 YO Graphic-01It’s become enormously popular to publicly lecture 20-somethings.  I’m not a 20-something, but my regular interaction with the Millennial generation as a college instructor leads me to conclude that we may have more to learn from 20-somethings than we have to teach them.

Here are 20 lessons in LIFE, WORK and MONEY inspired by the Millennial generation:

In LIFE…

Nobody responds well to being lectured.   Despite the ineffectiveness of self-righteous bombast, it seems never to be in short supply.  Insisting that someone else sees how wrong they are may guarantee that we will feel more right—but it doesn’t necessarily make it so.  Even if you have good intentions, the best time to teach someone something is after they’ve asked for input.

Life needn’t be so strictly compartmentalized.  Work, family, leisure, service, worship and artistic expression are elements of life that remain segregated for most.  But this schizophrenia of roles leads to inauthentic living in one or more of these venues (and drives us crazy).

We should give ourselves permission to be more of who we are and less of who people want us to be.  There’s an externally successful business owner who shows up at my gym for his morning workout dressed to the nines in a suit and tie.  He didn’t come from a meeting—he just thinks it’s important to send a message everywhere he goes that he is successful (and he’s happy to announce it).  The Millennials’ refusal to engage in such posturing is often mistaken for aloofness or apathy, but it’s really more about a healthy yearning for authenticity.

Being miserably busy is not a good measure of self-worth.  Busyness is no virtue.  It leads to forgetfulness, distraction and tardiness.  And it’s exhausting.

We are human beings, not human doings.  We tend to explain who we are by listing what we do for work and what we have accomplished professionally.  Millennials are more comfortable in their own skin and more capable of enjoying time that can’t be measured in terms of productive output.

 “American” is not actually a language.  Millennials are the first generation in decades who don’t take American pre-eminence for granted.  They’re expanding their personal and professional horizons with international travel and picking up a second or third language.

Traditional education is overvalued.  While Millennials are known for having overpaid for higher education, their dissatisfaction with what they got in return—fueled by their angst over the loans that now burden them—are serving to ensure that they and their children will spearhead the biggest education overhaul in a couple centuries.

In WORK…

Being a slave to work is no badge of honor.  Being the first in and last to leave may send a message to the types of people who value an ascetic work regimen, but it will also send a message to your family and close friends that your work is more important than they are.  Which message do you want to send?

We’re not all productive in the same ways and at the same times.  Sure, there are advantages to being an early bird, but the best employees will figure out where, when and how they work most effectively, and the best bosses will encourage them to do so (to a mutually beneficial end).

Work and life aren’t something to be balanced, but instead something to be integrated.  That we must balance work and life implies that they are seemingly opposed forces incapable of being effectively blended, but the most effective leaders and satisfied employees find ways to bring work to life by inviting more life to work.

Success is overrated.  Boomers have made an art form of becoming successful, or at least appearing so.  Success certainly isn’t a bad thing, but when the visible representation of success (more impressive titles, bigger houses, nicer cars, granite everything) takes precedence over those for whom we supposedly became successful to serve, we have a problem.  This isn’t even a generational thing.  It’s never really been true that reaching the pinnacle of success is what ultimately makes our lives fulfilling—it’s really significance and meaning for which we hunger.  Millennials seem to have a better handle on that.

In MONEY…

You don’t have to “get settled down” right away.  Financial planner, Roger Whitney, told me “[Millennials] are getting married later in life [than Baby Boomers] which gives them time to mature and be more financially secure when entering marriage.”

Money shouldn’t be a taboo topic of discussion.  30-something personal finance writer, Arielle O’Shea, finds Millennials to be more open about money.  Even if it’s because they’re more cynical about financial security, having seen a couple bubbles burst and many of their parents split over financial issues, Millennials seem to be more open to discussing their personal finances (to good effect) with each other and in public.

We don’t have to own everything—sharing is ok too.  Having to own everything we touch in this lifetime may be good for auto and home improvement companies, but it’s certainly not the most efficient or inexpensive way to do things.  Airbnb allows users to swap living spaces, Lyft offers a network of drivers when you need a ride, and that’s just the tip of the iceberg in the growing sharing economy.  Millennials are making and saving money with services like these, according to Forbes writer, Maggie McGrath.

The acquisition of real estate is overrated.  Creating stability, building equity and getting tax deductions are all good things—but losing money and depriving yourself of the freedom and flexibility to be mobile are not.  Millennials haven’t abandoned home ownership, but we all need reminding that it does have its drawbacks and shouldn’t be a foregone conclusion for everyone all the time.

We can and should embrace the role of technology in our financial lives.  The financial services industry is known more for hindering progress and clinging to antiquated, high-margin practices and procedures.  Millennials, however, are creating and “using websites such as Mint, You Need a Budget or Manilla, which not only help to track spending, but serve as accountability partners with e-mail alerts when spending limits are exceeded,” according to Mary Beth Storjohann, founder of Workable Wealth.

Youth isn’t a license to embrace reckless investing.  Carmen Wong Ulrich, host of Marketplace Money on APM says “[Millennials are] less likely to want to risk investing their money in the markets, but that also means they’re more likely to stay away from the financial products (and marketing) that burned their parents.”  Indeed, losing money isn’t a good strategy, regardless of your age.

Experiences are more valuable than things.  David Burstein, Millennial author of Fast Future: How the Millennial Generation Is Shaping Our World, acknowledges that 20-somethings are spending more than any past generation on travel and eating out, but it’s because they place a higher value in deepening interpersonal relationships and creating lasting memories.

The “traditional” notion of retirement isn’t necessarily an ideal.  Millennials tell me that they expect to be working a long, long time.  They don’t expect pensions and don’t trust Social Security, leaving them with little choice, but they also don’t idolize the notion of full-time feet-in-the-sand retirement.  They plan to work longer and enjoy themselves more along the way, many of them hunting more for a calling than a job.

You can do well and do good at the same time.  Profit or charity—take your pick?  The Millennials have invited us to consider that we don’t have to choose between Robber Barron or do-gooder.  In addition to Google’s unofficial motto—“Don’t do evil”—companies like Toms and Warby Parker give one pair of shoes and eyeglasses (respectively) for every pair sold.

Every generation finds comfort in the norms it helped establish and relishes in the norms it helped deconstruct—but the outgoing generation tends to not-so-quietly mourn when the incoming generation does the same.  Pew Research calls the Millennials confident, connected and open to change.  Yes, it’s a little scary that 20-somethings are changing the way we live, work, play, invest and worship—all without even asking our permission!  But it’s not necessarily a bad thing.

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you'd like to receive my weekly post via email, click HERE.

How To Show People You Don’t Care About Them This Holiday Season

0079936679582_500X500Bankrate reported the findings of a survey this week, suggesting that 53% “of the general population preferred general-purpose gift cards.”  These cards, unlike brand-specific gift cards (for iTunes or Best Buy), allow a gift recipient to spend their gift allowance however and wherever they choose. But think about this for a moment—if everyone gave everyone else a general-purpose gift card, it would effectively eliminate the purpose for giving entirely!

Envision this with me:  If I give you a $35 general-purpose gift card (GPGC) and you do the same in return, we’ve effectively given each other nothing at all.  We could just skip the whole charade and spend our own money on ourselves.

In giving each other the opportunity to buy anything, we’re actually giving nothing at all.

Why the rise in the popularity of GPGCs?  Bankrate answers that question:

"It's a much easier, more popular way to provide a gift to somebody," says Madeline Aufseeser, senior analyst at Aite Group. "If I don't know your particular taste or size, then I am safe with a gift card."

It’s easier.  It’s safer.

It doesn’t require you to really know or care about a person.  It saves you the time of applying any meaningful thought to what makes your friend or loved one unique.

It eliminates the possibility that you’ll read someone incorrectly and guess wrong, but in playing it safe you’re also guaranteed not to get it right.  Not to leave a memorable impact.

So if you want to show that special someone that you really don’t care that much about them this holiday season, by all means, get them a general-purpose gift card.

Heck, maybe we could even start a movement among our family and friends openly acknowledging that we’re all too busy and we care far too little to engage in the antiquated notion of purchasing gifts that symbolize our mutual affinity for one another.  Let’s just agree to ditch gifts all together and go on individual shopping sprees for ourselves.

Tis the season.

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you'd like to receive my weekly post via email, click HERE.

7 Steps To Creating The Best Personal Task Management System With Trello

7 Steps-01I have tried more productivity systems and tools than could possibly be productive.  Stephen Covey’s 7 Habits are deservedly legendary, and I’m better for every habit I’m able to employ.  David Allen’s Getting Things Done (GTD) methodology was even more helpful for me, especially because it seems to hone the best of Covey’s principles to a more elegant simplicity.  But both of their complete proprietary systems proved too much for me to maintain long-term.

After keeping up for a few weeks—even past the 21 days that supposedly cement a new habit—I always failed to maintain the system after a reliably random task turned into a seemingly wasted day followed by a week of piled emails and unfulfilled pledges (and all of the guilt and shame to boot).

Another reason I’ve failed to maintain well-meaning systems is that after the initial novelty wore off, the checklists and to-dos all seemed to become rote and, well, boring.  I needed something more visual and engaging to hold my attention.

Then Ryan Carson, the founder of Treehouse, introduced me to Trello (via blogger Leo Babauta).  Trello is a highly visual (free) online collaborative project management tool (with access online and on iOS and Android devices), but Carson re-engineered it to become his go-to personal task management system.

I’ve been using it for five months now without fail, synthesizing everything from Covey and Allen that stuck, along with Carson and Babauta’s wisdom, to create the only task management system that’s ever really worked for me.  Here’s how it works for me and could work for you:

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1)     After creating a Trello account, create a new “board” and call it Tasks.  Each board is comprised of vertical “lists”—these will function as your task prioritization system.  Then, each new “card” you add to a List represents an individual task.

2)     Create your lists.  My lists are a conglomeration of what I’ve learned from Covey’s 7 Habits and Allen’s GTD.  My first list on the left is called “Big Rocks”—the priorities in life that I want to consume the majority of my time.  Next is “Today,” the list of items that I hope to accomplish today, followed by “Incoming,” new tasks that have yet to be prioritized.  As you might guess, “This Week” houses the tasks I hope to accomplish this week; “Later,” those tasks I’d like to get to eventually but are not yet urgent; “Waiting On,” that which I’ve accomplished but requires action on another’s part; and “Done,” a list of the tasks I’ve accomplished that day.

3)     Whether you call it Big Rocks or Big Picture (Carson) or Most Important (Babauta), create a list under that heading with your biggest priorities in life.  Mine are Spiritual, Family, Health, Writing/Speaking, Business and Personal.  Now, click on your first prioritization category listed; you’ll see an option to “Edit Labels.”  I recommend making each of your Big Rocks a specific color, and clicking “Change Label Titles” will allow you to give each color a name corresponding with your Big Rocks.  Now, each time you add a new task, you can color code it with an appropriate label.

4)     Add tasks.  If you’re importing tasks from another system or just want to do a brain dump, add all of your tasks to Incoming and then decide where to put them later.  Click “Add a card…” at the bottom of the appropriate list and type a brief description describing the task to be performed.  Before you even hit the green “Add” button, hit the drop down in the bottom right corner and that will give you the option to add a label.  Once the task is added, a host of new options can be seen by clicking on the card itself.  Here you can give the task a longer description, create a checklist within the task, attach a file or give it a due date.  Preferring the GTD approach, I keep it simple and trust my daily prioritization ritual.

5)     After adding a bunch of new tasks, it’s time to prioritize each one by placing it in the appropriate list.  Simply click and drag the card with the task you’d like to prioritize and move it to the appropriate list.  If your lists span beyond the edge of your screen, you can simply hover on the screen’s edge and watch the board traverse in that direction, allowing you to place the card in the list of your choosing.  You can also grab and drag the screen in any direction you choose.

6)     The one essential habit you must form for this—or any other task management system— to work is to perform a review of your tasks board each morning.  Ryan Carson recommends taking 19 minutes to start every day organizing your to-dos.  “Limiting this to 19 minutes,” he says, “keeps you focused and ensures you don’t spend all your time prioritizing instead of doing.”  First, add any meetings or calls on your calendar that day to Today with a precursor (M) for meetings and (C) for calls, along with the time. Then, relocate new Incoming tasks to the appropriate list.  Review This Week to determine which tasks should be completed Today.  Then, review Later to see which tasks should be bumped up to This Week and scan Waiting On to determine if you need to nudge someone else.  Only keep tasks that were completed for a single day in the Done list, purging this list each morning by either moving the task to Waiting On or archiving the task.  You can archive individual tasks by clicking on the card’s drop down, or you can “Archive All Cards in This List” by hitting the list’s dropdown in the upper right-hand corner.

7)     Now, the fun part—getting things Done.  If you spent 19 minutes reviewing your board in the morning, you shouldn’t need to look at any lists except for Today and Done for the remainder of the day.  Throughout the course of your day, move completed cards to Done and reprioritize Today, leaving the next action to be performed at the top.

One of the perpetual faux-tasks that leads many of us astray from the completion of actual tasks is our email.  As Claire Diaz-Ortiz reminded me this week, “Email isn’t work.”  It certainly feels like it, but email is more a conduit leading us to tasks than a task in itself.  Your email inbox is also a horrendous task management venue because it distracts us from the next task on our priority list, but we do often send and receive tasks through email, so Trello provides us with an answer:

Hit “Show sidebar” in the top right of your Trello screen; under the Menu header, click on Settings, then click on Email settings.  This will allow you to copy and paste a specific email address that will send emailed tasks from your inbox to the board and list of your choosing.  (Be sure to create a contact for that email address—something like Trello Tasks—and you won’t have to remember the email address.)

Trello is intended to be an interactive project management solution for groups, but it has become my highly-individualized, personal task management system of choice.  The interactive, visual nature of Trello is what attracted me to it and has kept me using it, but the best part about it is that you can create your OWN system within Trello.  Once you do, or if you already have, I’d love to hear about it.

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you'd like to receive my weekly post via email, click HERE.