80 – Reset

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Episode Overview:

Ken has undergone tons of changes these past few months. From a pandemic to braces to a new house (ep. 73), Ken has taken the opportunity to reassess his own financial outlook. He revisits his new recurring expenses, automated payments, changes in cashflow. He then applies these new factors to his financial plans – which has been a bit neglected during COVID. All this to get back to truth and back on track, because life can be messier then a spreadsheet.

Transcriptions are auto-generated, please excuse grammar/spelling!

Happy day to you. This is Ken Kaufman, and I am thrilled you’re here for episode number 80, “Reset.” And, actually, the title for this podcast could be, not just “Reset,” but “Update,” “Refresh,” or maybe even “Start Over,” “Start From Fresh.” Now, I’ve gone through a lot of life changes here over the last several months. You heard the episode where we had finished our house, and we’ve moved in. And we had been renting a place prior to that. And that caused a lot of change in our net worth and it caused a lot of change in bills because the old place we were renting, we got part of our deposit back, which was an absolute miracle. We had utilities and things set up there that we had to cancel those. We moved to the new house, we have a new mortgage on the house. We haven’t been with one here for a while while we were building. So we have a new mortgage. We have new utilities to pay and to get all those things set up, not to mention, we’ve had a few other things change. Some of the kids’ activities have changed and we’re paying for some of those dance lessons, and piano lessons, and math tutor, and those sorts of things. And we’ve also had a change in that my two oldest daughters that are home have both completed their braces and we had finished paying for those, and now my next son in line is just barely getting started up in that process. And so now we have a new payment plan that we’re going to be, you know, engaging with the orthodontist on.

And so there’s a lot of changes, and I felt like, “All right, it’s time. Once we get moved in and get settled, I’m going to go back in. And first, I’m going to take a look at the budget. And I’m going to make changes about, ‘Hey, we were paying for utilities at the old place. Now we have the new place. We have a mortgage payment. You know, that’s new, at least we hadn’t been doing here for the last little bit, and we’ve made changes in these activities. And how are we going to pay those? Is it going to be automated, or am I going to need to manually process making payments for these different things and services?'”
And so it’s going through and getting all that set up and organized inside the budget so we could see what was happening and where our money was going. We don’t have the rent payment anymore but now we have a mortgage payment. And so looking at what some of those variances and difference are and then what cash is going to be left. Because at the end of the day, the reason to budget is make sure you’ve got money that you’re putting towards your priorities. And so we’re reconfiguring things so that we could see how much money are we going to have on a week-by-week and month-by-month basis to direct toward our priorities.

And so I sat down and I did this reset, starting with the budget, like I just talked about. Then I dovetailed that over into our financial plan, which is a Google Sheet with multiple tabs. And there’s one in there actually with a mortgage calculator so we can see as we’re progressing through mortgage, if we pay extra or if we just pay, you know, the minimum required, what happens to those things in the process. All the investments are listed there and other assets, as well as the 5-10-15 plan that I’ve talked about in the past. And anyways, I’ve got a comprehensive set of tabs inside of a Google Sheet document, and I’ve just been going through and updating all of that. Well, I shared it here in the podcast, but I had a month in April where I didn’t get paid and had to get…I updated that because I really had neglected my plan since really COVID hit because we’ve been so busy with so many different things, working on the house, business, you know, my work, and everything else going on with our family. And so it just felt good. Just sit down and reset. Go through some of the numbers and rethink about some things. And there are a few things that stood out that I thought, “Wow, that’s going to work out better than I had thought it was.” And there are a couple things that maybe aren’t quite where I want them to be. But at the end of the day, the whole reason for this reset is not just like scrap everything and start over or refresh, this is about getting back to truth because our lives don’t always stick to the plan on the piece of paper, the budget or the overall financial plan. And so you have to go back, there’s a discipline. And there’s a huge benefit when you do because you learn a lot about what you were doing before and what you could possibly do now based on the new set of circumstances and new expenses, old expenses that are now gone, new income streams, whatever it might be in your life.

So that’s what I want to encourage you to do. When things get changed up enough and you know that you’re getting a little bit out of alignment with what you’ve documented as a financial plan, just stop. Do a reset. Do a refresh. And don’t feel bad about it. This is just life. Life happens. We have to iterate, and we have to keep resetting ourselves back to truth, whatever our newest and most updated truth is, so that we can more clearly and confidently understand what our future looks like, and then we can act to make the most of it and create the best outcomes for ourselves.

So that’s why I named this episode “Reset” so that it’s giving all of us permission whenever it’s time. And for me, it was time. I’ve been working on it here over the last couple of months or a couple of weeks and excited to really just have everything dialed in and honed in again and super clear. And then when my wife has questions, I can show her. We talk about this at least on a monthly basis anyway, but it just gives me so much confidence for moving forward. And, I think that it can do the exact same for you. And now if you’re somebody who doesn’t create their own financial plan, you have somebody that does it for you, I would just recommend, get in front of them and do the reset. That should be part of what they are getting paid to do. If they’re investing your money for you and getting paid some type of a fee for that or however that relationship is set up, get that advisor back in your life. Tell them what’s changed. Have them rerun scenarios and relook at things and give yourself the ability to reset your plan and then move forward with confidence. Many, many thanks to you for joining today. This is a wrap for Episode 80. Happy day.

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About the Podcast

Join Chief Financial Officer Ken Kaufman as he helps you track and hack your net worth. For those seeking financial independence, your net worth is one of the most significant measurements of success. Using his two decades of financial experience, Ken Kaufman helps you overcome your financial obstacles and look onward towards a better, brighter financial future.

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