Setting intentions in 2024
If you’ve ever heard Mana talk about a new year, you know we’re all about intentions versus resolutions. There’s absolutely value in reflection, and we encourage all of our clients and readers to set aside a time each year to look back on all of your accomplishments over the last year, including net worth increase, savings, personal or familial advancements, investment growth, and experiences you want to remember.
When we think towards the future, our vote remains with intentions versus resolutions. No need to place judgment on your past actions or regrets of the prior year when it comes to your finances, rather set a path for yourself that guides you to your goal in the future.
As many of our clients know, I love thinking about different ways to budget. Now let’s be clear, I’m someone who loves to spend money, but witnessing clients' success when they spend and save intentionally, it’s very motivating. I’m reminded of a quote from Morgan Housel in Psychology of Money, “When most people say they want to be a millionaire, what they might actually mean is “I’d like to spend a million dollars.” And that is literally the opposite of being a millionaire.”
This holiday break, Bryan and I spent some time on our own finances, and I thought I would share some things that worked well and where we struggled, in hopes that it might help you set your new year off with intention. This is also a way for me to stay accountable, so for that, I thank you.
Getting centered on what’s most important
We started by discussing our priorities: how do we want to spend and save this coming year? What worked well last year and what’s new on the horizon? For us, we’d love to invest in our kitchen. It’s something we’ve been steadily saving for the last two years, but we also noticed that the upcoming year is shaping up to include a lot of travel. With this shift in spending now identified, we were able to discuss some adjustments to accommodate.
We committed to three core financial intentions for the house:
A budget of how much we can spend on the kitchen, giving a 20% buffer for overages as they often occur! This money is already saved in a combination of a high yield savings account and in bonds, and because interest rates are high, we are committed to paying in cash.
We always keep a buffer of 1% of our home’s value in our monthly budget. We committed to reviewing this once a month, and transferring any money we didn’t spend that month to our high yield savings account. We have set up an automatic transfer from our checking to high yield savings account for this amount, less an estimate of what my average smaller monthly home upkeep costs are. When bigger expenses arise, we can use the high yield savings account to pay for them
We acknowledge that this will be a huge cash outflow for us, and we have felt more secure with cash and investments on hand. We’re committed to making small trade offs in other places to bolster our savings.
For travel, I find that it’s easiest to look at over the year. And maybe the year is overwhelming, so at least take a stab at the first 6 months. In a spreadsheet we detailed all of the trips we have, and included estimated costs for flights, hotels, food & drink, activities, shopping, and gifts. We added them up and divided the total by 12 to come up with our monthly budget. We made sure that our monthly travel budget fit into our monthly joyful spending bucket (about 25% of our take home pay). Knowing this is a big travel year, we trimmed budgets for entertainment and shopping, and kept restaurants in line with where they have been - this is a category we constantly go over!
Setting a Mindful Spending Plan for 2024
Cristina loves to say, “in financial planning, you can have anything, you just can’t have everything.” The second part of that sentence is very important! The next part of our discussion was: if we’re prioritizing home & travel, how do we make sure we reel it in when we’re at home? How do we track this most effectively? Spending within your means is key, and something that we’ve seen work well for our most successful clients at Mana is saving in a diversified portfolio somewhere between 5-20% of monthly take home salary (amounts will depend on your goals) in addition to the majority or bonus and stock compensation. These exact benchmarks and spending plans can sometimes be tricky for dual-income households to think about, so I wanted to share how Bryan and I broke our plans down below.
First, we reviewed last year’s expenses for essentials expenses: home, bills & utilities, car, insurance, medical, kids, pets, business, and groceries. We updated the expenses within our budget to reflect where they have been over the last 12 months. We use eMoney to track our expenses, our clients know this software as the Mana Portal.
Next, we determined how much we want to save per month in 2024. Our target is 15% of take home pay, and we will allocate those savings to building up our emergency fund.
Lastly, we determined how much money we have to spend on joyful expenses. Easy enough - the remainder! Since travel was our highest priority, we allocated those funds to that category, and split up the remaining funds between restaurants & bars, entertainment, shopping, health & wellness, and gifts.
This joyful spending budget is nice on paper, but in comparing this year’s budget to last year’s spending, I recognized that there is some work to do! I decided to answer the question: what are small budget changes that I can make that add up?
I jotted down a list of actions that I take on a regular basis and how I could adapt them. Then I added up how much it would save me per week / per month / per year. I came up with nearly $10k in savings with very small changes.
Some of my favorites:
Choosing two dinners out per month where I opt out of alcohol, saving $200 per month on the combination of restaurants and Ubers
Planting a cut garden versus purchasing flowers in the store saving $40 per month;
And this one really surprised me…. Switching from macadamia nut milk to oat milk, saving $575 per year!
Be as specific as you can to make a meaningful change in your habits, and have this change flow straight to your savings!
Staying accountable
I have a strong preference for a three pronged approach: create simple rules, automate savings, and track spending where it matters.
As a couple, we have three checking accounts: one joint, and two individual accounts. The majority of our take home pay goes into our joint account, but we get a small allotment of cash every month that we can each spend on whatever we want. We got into a good habit of paying for all personal expenses within our personal accounts, and all family expenses including restaurants, travel, and gifts through our joint account. Over the last year, I realized that my personal expenses tend to be higher as a woman than Bryan’s. We spent time discussing what makes sense to put on the joint card versus what we would spend on our personal cards. One simple example we identified this year - nails every month is no problem to have on the joint card, but nail art every month is something I should pay for. Every couple is different, but coming to agreed upon terms makes the month-to-month so much easier!
We automated the savings from Checking to our High Yield Savings Account directly after the paycheck is deposited. Our goal is to keep as little in our checking as possible, without stressing us out, and ensuring the minimum balances are met so banks don’t charge fees.
We decided to keep a budget tracker on the Mana Portal that only reviews the following joyful expenses each month:
Restaurants & bars
Entertainment
Shopping
Health & wellness
Gifts
We’re tracking the things we know are important for us to stick to in order to keep with our budget. It’s a lot less likely we’ll over spend on utilities or pets, but these categories are where we tend to be more mindless.
Because we incorporated all travel related expenses (food, activities, gifts, shopping) within travel, we agreed to categorize them accordingly as travel. We’ll review YTD travel on a monthly basis versus our targets on an annual basis, since this can ebb and flow so much on a month-to-month basis.
We’re both busy - so we also have a standing calendar meeting every 2 weeks to chat through these things together!
Bringing it all together
In gearing up for 2024, Mana is all about the effectiveness of intentions over resolutions when it comes to money. Instead of dwelling on the past, we encourage you to carve out a forward-looking path guided by purpose. Prioritize what’s most important to you and spend joyfully to achieve your dreams, but only after you’ve automated your savings and established a safety net to handle unexpected expenses. It's all about striking a confident balance between intentional spending and financial peace of mind.
Planning epic adventures, sticking to budgets, and tweaking the small stuff—that's the Mana mantra. We've taken a deep dive into our spending habits, found spots for improvement, and realized the game-changing magic of mindful money moves. Automation and staying on our toes keep us in check—savings on autopilot, budgets on the radar. Here's to cruising through 2024 with intention and teamwork, proving that purposeful money moves and smart spending can make the year pop!
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Stephanie Bucko and Cristina Livadary are fee-only financial planners based in Los Angeles, California. Stephanie is the Chief Investment Officer and Cristina is the Chief Executive Officer at Mana Financial Life Design (FLD). Mana FLD provides comprehensive financial planning and investment management services to help clients grow and protect their wealth throughout life’s journey. Mana FLD specializes in advising ambitious professionals who seek financial knowledge and want to implement creative budgeting, savings, proactive planning and powerful investment strategies. As fee-only fiduciaries and independent financial advisors, Stephanie and Cristina never receive commission of any kind. Stephanie and Cristina are legally bound by their certifications to provide unbiased and trustworthy financial advice.