Power Up Wealth podcast – 7 Money Resolutions – Episode 64 transcript:
Sharla Jessop 0:00
New Year’s resolutions can be hard to follow and too often fizzle by March. Today, my guest and colleague, Parker Thompson, will share seven ideas to help us set meaningful financial goals.
Welcome to the SFS Power Up Wealth podcast, where we provide impactful insight and expert opinions on timeless financial principles and timely investment topics, preparing you to make smarter decisions with your money.
Thank you for joining me today, Parker.
Parker Thompson 0:46
Thanks for having me on.
Sharla Jessop 0:46
Parker is an advisor on the wealth management team at Smedley Financial and he works with clients helping them create financial plans that focus on meaningful and achievable goals. Parker when it comes to money, setting goals, and making resolutions can be really tricky. In your MoneyMoxie article, you share seven money resolutions, can you explain these seven ideas and how they differ from maybe traditional financial goals?
Parker Thompson 1:09
I started thinking about New Year’s resolutions especially financial ones, and the first ones that came to mind are the ones that I’ve always set for myself in years past. And it’s just, you know, save more spend less cut back on this cut back on that. And they didn’t have a lot of subsistence to them it’s like oh well, I mean.
Sharla Jessop 1:25
It didn’t sound fun at all.
Parker Thompson 1:27
No, it just to what end? What is the point of me cutting back on something? What is the why behind it? Right? We want to spend less, and we want to save more, but what is the purpose for that savings? Do we have a task for that? Or do we have something exciting that we’re saving for? I feel like it’s a lot more motivating to look at the effect of the money or the effect of the cutting back as opposed to just saying, hey, we’re just going to spend less.
Sharla Jessop 1:45
When you just say, hey, we’re going to spend less it feels a little bit like a punishment, don’t you think?
Parker Thompson 1:49
Right? Yeah, let’s cut back on something that I previously enjoyed that I can’t do anymore.
Sharla Jessop 1:53
You’re never cutting out stuff that you hate, you’re always cutting out stuff that you really like.
Parker Thompson 1:57
Right? Right. I mean, we always want to be better, we want to be better, we want to be healthier, we want to be more financially free. And so a lot of those things that we get caught up in that we enjoy sometimes can be a hindrance to those things so.
Sharla Jessop 2:09
So tell us what your first recommendation is.
Parker Thompson 2:11
So the number one is, and again, these are financial goals that are based on how money plays a role in our lives and our emotions towards money. It’s not your typical money goals, because an even better goal than just cut back or spend less is, you know, max out my 401k or max out your IRA and have a specific dollar amount, right. $7,000 for 2024 to max out your your IRA. But another step I think above that is to what end are we saving that for? So the first one is to create a greater sense of ease. And when you think about getting a greater sense of ease, what can we do to make sure that we’re not basically subject to some of the follies of life, or that we’re not risking certain events in life that could really throw off our financial plan. When I think of creating a greater sense of ease with money, I think of emergency funds. I think of life insurance. I think of property insurance. Where in our life can we mitigate risk a little bit more? And especially when it comes to emergency fund. What is that emergency fund for? What comforts does that afford us? Because if we’re always wondering, okay, what happens if we lose a job? What happens if the car breaks down? That can really put a stress on us.
Sharla Jessop 3:17
Almost feels unrecoverable. I mean, you feel like you’re under the gun all the time. And money is a tool, you know, to be used. Create what you’re saying some sense of ease where you get rid of some of the worries, right.
Parker Thompson 3:27
Right. I mean, I think there’s a little bit of of some stress and some motivation that causes you to get up, get out of bed and go to work and earn money, right. But some of those things that we can’t control, the car breaking down, or the loss of a family member. Those things, it pays to have a little bit of an emergency fund or some sort of a protection and insurance that can really take that burden off of us if that ever happens.
Sharla Jessop 3:48
I like that. What’s the second recommendation?
Parker Thompson 3:51
The second one is to spend in ways that are true to who you are, and not others expectations. I find this interesting because we live a certain lifestyle that we think other people expect us to live, right whether we have higher income or lower income, whether we like a certain hobby, or we don’t like a certain hobby or lifestyle, we sort of live expectations of what of the people around us. We live the expectations of our family, what they expect us to be doing. And I think that’s a trap that we can fall into all too easily. Whereas this is reminding us that we need to spend and live and use money in ways that are true to us and not what other people think we should be using that money for.
Sharla Jessop 4:30
Kind of like not keeping up with the Joneses.
Parker Thompson 4:32
Right? Yeah, that’s kind of a different way of saying not keeping up with the Joneses. It’s not saying hey, for my certain income, or my certain profession, I need to have a certain car or my family expects me to take a certain amount of trips to a certain amount of luxury places, even if those things don’t mean anything to you or if they’re not what you would prefer to do with that money.
Sharla Jessop 4:50
Or have the hottest technology and the new iPhone.
Parker Thompson 4:54
Yeah.
Sharla Jessop 4:54
When my other phone has worked fine up until that point, no, no reason to change.
Parker Thompson 4:59
Right, right. If it’s not broken, don’t fix it. Or if it works for you, if it’s something that you enjoy, and you spend money on or not spending money on, you don’t have to go out of your way to spend money or to change your lifestyle because someone else expects you to have that certain item or materialistic pleasure.
Sharla Jessop 5:12
I like that live true to yourself.
Parker Thompson 5:14
Yeah.
Sharla Jessop 5:14
What’s your next point?
Parker Thompson 5:15
Number three is buying yourself time. We always hear that often use rate and time is money. And this is where I thought of this as okay usually with a New Year’s resolution, we try to spend less money. We try to cut back. We try to be more financially frugal or prudent. This is one where I’m saying let’s think about areas that we aren’t spending money, but that we’re spending a lot of our time in. And this could be something as simple as doing a lot of housework, doing some yard work, doing some cooking or cleaning things that take the majority of our day or week where we would rather outsource that and pay someone to do it. And so we get our time back to do things that we find more valuable, like spending time with family, spending time with friends, things that we don’t normally get to do, because we think, oh, yeah, we need to you know, get the yardwork done. We need to get the housework cleaning done.
Sharla Jessop 5:58
There’s not gonna be any fun until all the chores are done. That’s the way I was raised.
Parker Thompson 6:01
I think there’s a balance for those people who have the ability to spend a little bit on outsourcing. And this doesn’t have to be every single week doesn’t have to be every single month. But if there’s I think I heard of, there was a client that had said, hey, we actually outsourced our Thanksgiving dinner preparation and cleaning. So they brought someone in, and that person prepared and made and served and clean up everything for Thanksgiving dinner. And they were able to sit with their kids and just enjoy talking to them where they would normally be working in the kitchen for 12 hours.
Sharla Jessop 6:29
It’s nice. It’s giving yourself permission to spend the money to give you more time to do things that are really important.
Parker Thompson 6:35
Yeah, time time is a lot more valuable than money. And that’s where that saying comes from. And so this is just a way of saying you can spend on some things that afford you more time to do what you’d like to do.
Sharla Jessop 6:35
I like that. I’m going to reassess my budget, see where if there’s some places where I can find some more time.
Parker Thompson 6:50
Right. The fourth one that I have on here is to express your values. A lot of the times we don’t think of in terms of when we’re spending money, or when we’re buying things purchasing things is this according to our values, and we don’t always think about our values in our everyday life, sometimes it’s just the monotony of the day that goes on. This one is something that our clients have done really well. But that we we try to encourage people to do as much as possible. And that is what can we do with the money that really shows what we care about in life. And in this case, some examples are some of the meaningful gifts that we see people give some of the donations to charity, helping pay for friends and families medical costs, or tuition, school costs, or even just spending for family time. We see a lot of people who will afford a vacation so that they can get time with their family. Those are some ideas, but that’s how people express their values. If they value family time, and they value education, they value health, a lot of times they will, you know, a lot of times, that’s how we have to think in terms of spending our money.
Sharla Jessop 7:44
I like that too. I think that’s really you know, if it’s important to you to have for your family get together. And you know, everybody is not in a financial position to be able to do that to be able to help them be there financially.
Parker Thompson 7:55
Right? It just helps people to understand what’s important to you. Right? If you value family time, then essentially you put your money where your mouth is.
Sharla Jessop 8:02
What’s the next one.
Parker Thompson 8:03
Number five I have don’t confuse what you buy with joy. This is something that I think we all have to figure out is that the shopping spree to the mall doesn’t always give us all the satisfaction or the joy that we think it will or that new outfit or that new technology isn’t always going to make our life better. And so we don’t want to confuse materialistic things that we purchase with happiness. We want to seek happiness in other ways. And sometimes that does mean spending money. Sometimes it’s something you really do need that’s going to affect your life. And that’s going to improve your life. A lot of times, it’s hard to equate happiness with materialistic purchases.
Sharla Jessop 8:33
I agree with that. I think very few times I can think of when a material purchase has made a real lasting difference. And oftentimes, they’re forgotten within a short period of time. That reminds me of Christmas day, you know what happens in March? How does the kids look at Christmas day when it’s March? And what do they still play with? What’s important to them?
Parker Thompson 8:52
It was a lot more real to me with my young kids this year. Where we try to line up as many gifts as we think that they need, you know, that we think will make them very happy. And the reality is, is that my kids are so young that they stick to one toy. It’s the first toy they open, and they’re super excited about it. And they don’t care about anything else that comes after that.
Sharla Jessop 9:08
They don’t want to be taken away from that first toy.
Parker Thompson 9:12
They’re so infatuated with the joy that came from that first opening of the present and the kids almost like the opening the present more than they liked the actual toy. So it’s those things that we need to reevaluate before making the purchase. Is this going to bring joy? Can I find it elsewhere?
Sharla Jessop 9:21
And is it just excess?
Parker Thompson 9:26
Yeah, number six is very similar to number five. Focus on what brings you contentment. One of the exercises that this article goes through is having us think back to our childhood years. What made us happy? When we were kids, what did we like to do? What brought us contentment? Because when we were kids, we didn’t really have a lot of money. We had to think of what we like to do and what made us what made things fun in life just out of thin air. Had to be creative. A lot of times we lose track of that because we think everything has a dollar amount attached to it and when we’re older but if we go back and we think what did I like as a kid and what brought me joy that might spark something.
Sharla Jessop 9:55
Yes, sure. I’m thinking this you’re saying this I’m thinking riding my bike. As a kid that was I was what was fun. So can you translate that same feeling into how you’re spending your time and money now?
Parker Thompson 10:06
Should you be spending money on more things related to using a bike or around biking, right? It’s not that that’s going to be free. But that’s going to bring you more joy than as opposed to well, I think I want to get into something else and spend money on all that.
Sharla Jessop 10:19
And some things that create extra curricular activities. Because in my mind, a lot of what you’re talking about now is maybe extracurricular activities can be really costly. You might not be able to use them as often as you think you’re going to use them.
Parker Thompson 10:30
Right.
Sharla Jessop 10:30
And it becomes a burden.
Parker Thompson 10:31
The way I use it in my life is I just think, what do I thoroughly enjoy? What did I enjoy doing as a kid as far as sports and activities and just being active, and I can spend my money on those things, because I know I’m going to get your joy out of it. If I get pulled in a different direction, hey, come spend money on this and try this out and try this new hobby. I might want to try that. But I’m not going to spend a lot of money and time on it. Because I already know what I like doing as a kid.
Sharla Jessop 10:54
And that makes perfect sense. And also, I think sometimes we think we have to own something in order to enjoy it. And the reality is, oftentimes you can just rent if you wanted something to do. And you know whether it’s I want to take my family boating. You don’t have to buy maybe $100,000 boat, maybe you could just rent a boat for a weekend and get the same joy and not have to worry about all the extra expenses.
Parker Thompson 11:18
Absolutely. The title of it is find what brings you contentment. And we say this all the time in client appointments and client meetings is at what point is enough? At what point are you content with what you have? Are you happy with what you have? And usually you don’t need more.
Sharla Jessop 11:31
That’s so true, because time is limited as well.
Parker Thompson 11:33
Right? And you can get lost in the achievement of more materialistic or just more of something that you don’t necessarily need that’s going to improve your life. So being contented is key.
Sharla Jessop 11:42
I love the last one, figure out your relationship with money.
Parker Thompson 11:45
Right? I feel like this sums everything up as far as we want to make sure that you and money have a good relationship. We want to make sure that you understand what money does for you in your life. You know how it affects you emotionally and you know how to be in control of it. That’s the most important thing. Money only does what you tell it to do. This is the same thing that we have clients run through when they when we talk about a budget is you want to make every dollar have a responsibility in your budget, right, and have a purpose for that dollar. It’s the same thing with our expenditures and how we use money throughout our life. What is the purpose of that money? Is it helping me? And is it making me happier? Is it making me unhappy? Making sure you have relationship with money and make sure it’s a good relationship instead of a bad relationship can really help you going through life’s you know, ups and downs.
Sharla Jessop 12:25
It can also help you as you’re trying to achieve your financial goals. Understanding what your relationship is with money.
Parker Thompson 12:30
Yeah, you understand that? Okay. retirement goal is not just a retirement plan, but it’s okay how do I want to feel in retirement? And how do I want that money to work for me in retirement? What are the things that I want to afford and the feelings that I want to get from that, you know, expenditure, that saving, that investing.
Sharla Jessop 12:46
Parker, these are great ideas, and I think it changes people’s perspective when they’re thinking about making New Year’s resolutions or financial goals.
Parker Thompson 12:54
Absolutely, yeah. Hopefully this helps people to think a little bit differently and not just, you know, to resent cutting back or switching up their budget or spending more on something that they don’t necessarily care more about. But to realize that money can do a lot more for us if we think about how it affects us emotionally, behaviorally.
Sharla Jessop 13:10
Yep, I like it. Because now rather than just making a task list of things we need to do. Now we have some vision of where we’re gonna go.
Parker Thompson 13:17
Right. I hope that everyone can reassess what money does and how it makes them feel before purchases, or before making goals.
Sharla Jessop 13:24
Thank you, Parker.
Parker Thompson 13:24
Thanks, Sharla.
Shane Thomas 13:25
Thank you for joining the Power Up Wealth podcast. Smedley Financial is located at 102 S 200 E Ste 100 in Salt Lake City, UT 84111. Call us today at 800-748-4788. You can also find us on the web at Smedleyfinancial.com, Facebook, Instagram, Twitter, and LinkedIn. The views expressed are Smedley Financials and should not be construed directly or indirectly as an offer to buy or sell any securities or services mentioned herein. Investing is subject to risks, including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual professional advice. Securities offered through Securities America. Inc., Member FlNRA/SIPC. Roger M. Smedley, Sharla J. Jessop, James R. Derrick, Shane P. Thomas, Mikal B. Aune, Jordan R. Hadfield, Registered Representatives. Investment Advisor Representatives of Smedley Financial Services, Inc.®. Advisory services offered through Smedley Financial Services, Inc.® Smedley Financial Services, Inc.®, and Securities America, Inc. are separate entities.
