Forward StoryMoney – Forward Story

The Power of Opportunity Cost & Why You Should Use It

Mark L. Casey — Wed, 14 Feb 2024 20:38:55 +0000

Writing this article has been on my task list for over three months. I chose to do many other things instead of writing it. I will come back to this at the end…

What on earth is opportunity cost?

Opportunity cost can be defined as:

The value of what you have to give up in order to get what you want.

Another way to say this is that opportunity cost represents the benefits you give up in choosing one option over another option.

It can be difficult to identify opportunity costs when the benefits of the alternative choices aren’t easily measurable. Fortunately, some alternative choices are easily measurable. Let me give you a couple of examples.

Smart Phone

I first encountered the concept of opportunity cost in economics. It is rather easy to see when you put it in terms of money. If I spend $1,000 today on a new smart phone, that is $1,000 that I cannot invest in a stock mutual fund (for example). Doing a quick financial calculation, if I take that $1,000 and invest it in a mutual fund earning a 6% annual return compounding monthly, in 20 years the value will be $3,326. So the opportunity cost of purchasing the new smart phone today is $3,326 in 20 years. Of course, there is value in me having that smart phone today, so I may still choose it. I will just be better informed about the actual opportunity cost of that choice.

It’s a New Car!

One more financial example.

As a young person, I felt it necessary to always drive a nice, new car. I never had the money set aside to be able to pay cash for a nice, new car, so I financed it (aka I went into debt). This means I had a fat monthly payment to make to the lender that funded the loan on the car. The financing was typically four years. I had to make 48 monthly payments before the car was really mine. This reminds me of the old saying “I owe, I owe, so off to work I go.”

As vehicles became more and more expensive, car dealers began working with their finance arms to offer increasingly long loan payoff terms. This was to keep the monthly payments “low.” That meant that to buy a new SUV, I might be making that monthly payment for six years or even seven years.

Let’s not get too crazy with this example. I am going to use the four year loan length. Let’s say I buy an SUV for $40,000. I finance all of the price at 6% interest for four years. My monthly payment is then a whopping $939 per month! On top of that, I still have to insure it, register it, maintain it with oil and tires, repair it when it breaks down, and keep it gassed up. That is quite a commitment.

The problem with a vehicle is that it is a depreciating asset. It goes down in value with each passing day. Eventually, it will be worth nothing. How do I know this? Most of the vehicles I have purchased are now rotting in a junkyard somewhere or have been crushed into large cubes. The same can be said of the smart phone. It will eventually be worth nothing.

Thinking in terms of opportunity cost, what would that $939 per month car payment be worth if invested in a mutual fund with a 6% return compounding monthly? In four years it would be worth $50,819.

When I was buying cars this way, there was a related problem I faced. After about four years I was ready for a new car. After all, the new car smell had long since vanished. The paint had a scratch or two. So I repeated the process. I bought into the idea that “I will always have a car payment.“

So let’s go with that logic and assume that I will continue making that $939 car payment every month for 20 years. When we do that math, at the end of 20 years I will own a fourth “new” vehicle that is worth a lot less than when I bought it. That is what a depreciating asset is after all.

If instead of purchasing vehicles this way over the 20 years I instead invested that $939 per month into a stock mutual fund with a 6% annual return, my value in 20 years would be $434,000. Guess what? I could then remove $40,000 cash from my mutual fund and pay cash for a brand new vehicle.

“Wow!” you say. “Why doesn’t everyone do it this way?”

For several powerful reasons:

To actually do it this way you have to delay gratification and possibly drive (G A S P) an old car you pay cash for. Definitely no new car smell there.
To do this you have to be able to withstand the constant marketing and advertising of some of the smartest people on earth whose job it is to get you to “need” that new car smell. Think white Lexus, huge red bow on top, and snow lightly falling on you and your golden retriever.
Finally, you have to overcome the peer pressure that might come from those who could look down their noses at you for driving something they view as beneath your station in life. What would the neighbors say?

Once I really learned the lesson about opportunity cost with regard to cars, I became a little obnoxious about it. In an effort to help my kids learn the lesson, I would sometimes look at a parking lot full of expensive cars and say something like: “Look at all those beautiful depreciating assets.” They were not that amused.

One reason few of us do the opportuntiy cost calculations above is that there is indeed value in doing or enjoying something today. Driving in that new car smell, getting the latest smart phone, or having that daily cup of joe brings a certain amount of pleasure.

The concept of opportunity cost is not limited to financial matters. The reason I am a guitar plunker with a very limited skillset is because 10 years ago I prioritized other things above playing guitar. Those things may have been more important, but I still chose them over guitar. I wonder how many things we could all learn and accomplish if we didn’t binge-watch streaming entertainment? It takes a certain amount of vision to see beyond the present moment and to see what this moment could lead to if I chose a different opportunity.

In chapter 11 of my book Forward Story I write about vision: “Your mind has an amazing ability to visualize a future that has not yet occurred.Some of the greatest inventors and entrepreneurs that have ever lived had the ability to visualize their invention and how others would use it. They could see how it would make peoples’ lives better before it ever became a product. That is vision.”

You and I likewise have the ability to develop the vision to see the opportunity cost in anything we buy or in any way we spend our time and talents. We must nurture that kind of vision.

Conclusion

Back to the point I began with. Writing this post has been on my list for over three months. The reason it was not written before now is that I took the opportunity to do other things with my time. The reason it is being written now is because I chose it over all of the other things I could have done with this time. Such are the decisions we make.

My encouragement to myself and to you is to be more intentional about the opportunities we take. Pay attention to opportunity cost. Ask “Is this the best and highest use of my time, money, and talents? Ask “What am I giving up or postponing by choosing this option?”

What Retirement Means

Mark L. Casey — Tue, 21 Sep 2021 16:56:47 +0000

Photo by Alexandra Luniel on Unsplash

Recently I wrote that it is time for me to re-write my Forward Story. That is because my wife and I recently achieved a major goal that we had been working on for well over a decade. With that accompished, it would be foolish to just meander without a new focus.

As I always do when I re-write my story, I start with the most distant timeframe I can envision. For me that is retirement.

The concept of retirement is a bit challenging. What does it mean to retire? We have all either known people or have heard stories of people that retired after a long employment and within a short time were either bored out of their minds or had actually passed away. Some people view retirement as a time to do nothing but relax and play.

Have you thought of what retirement means to you? I am fortunate to have many family members and friends that have already retired. By observing them I have a clear understanding of what retirement means to me. To me, retirement is simply that state of no longer needing to work for earned income. It is when passive income and/or retirement income supplies my needed standard of living. Let’s break this down:

Earned Income. Pretty self-explanatory, this is the most common form of income. I trade my time and talent for money. This could be hourly wages, salary, salary and commission, or contract. The biggest component of this that impacts my life is time.
Passive Income. This is income I receive from my investments. This can include equity appreciation through markets increasing, interest income, dividend income, etc. I get rewarded for putting my capital at risk. Very safe investments yield lower rates of return. Riskier investments typically have to pay higher rates to induce me into putting my money into them. Regardless of the actual investment vehicle and its returns, I get passive income from it. Instead of me working for my money, my money works for me.
Retirement Income. Increasingly rare, the company pension plan is an example of retirement income. Another example in the USA is Social Security.
Needed Standard of Living. Now we get a bit more complicated. I had to go and throw in the word “needed.” If I live in a tent on a friend’s property, my needed standard of living is very low relative to what it would be if I live in a four story house with a a gigantic mortgage. Of course, I get to determine my standard of living and whether I live in a tent, a four story house, or anything else. It is important to think through all of the implications of my needed standard of living vs my desired standard of living. I always need far less than I desire. You get to wrestle with all of that just like I do. As it pertains to retirement, the higher your standard of living, the more passive income you will need. This will likely delay your retirement.

Now that I have defined things, the main benefit for me once I retire will be more freedom over my time and talent. Without needing to use them for earned income, I now get to decide what is worthy of both.

Conclusion

Given this understanding of retirement, I have to calculate what that magic number is that combines both passive income and retirement income in such a way as to meet my needed standard of living. There is a lot of financial calculations and math involved in that. Nerds like me love this stuff. With all of the usual disclaimers about not knowing the future, we can then project a potential timeline for retirement.

Then I get to the more exciting part of writing the new story – envisioning the ways in which I will invest my time and talent in that new retired state. There may be some golf, tennis, and skiing in that for me, but that will be on the fringes. The retired people I know that are in their 80s and 90s are usually very active people that continue to serve and help their family, their friends, and their world. My plan will involve all of that.

What is your approach to retirement?

Keeping Up Appearances

Mark L. Casey — Tue, 27 Nov 2018 16:58:26 +0000

My wife and I are fond of British entertainment. One of the older shows we used to watch is called Keeping Up Appearances. The main character is Hyacinth Bucket. Now, to you her surname may appear to be properly pronounced like a pail in which you carry water. Oh no…. Her name, she insists, is pronounced Bouquet, as in an arrangement of flowers. You see, a bouquet is much more elegant than a bucket. Hyacinth tries really hard to distance herself from her low-class family and to convince the upper crust of society that she is one of them. She wants to belong.

The comedic angle is that she is not, in fact, one of them. There is great fun in watching her try to keep up the appearance that she is something that she is not.

On December 1 of each year I begin the process of revising my Forward Story. As I argue in my book, my vision for the future changes with the years and with my own ambitions and values. It would be ineffective to stick with a Forward Story from a decade ago. I need a new, fresh, and relevant story for what comes next. With this annual ritual, I always look back at where I have been and wonder how things might have been different. I try not to wallow in regret. The past is gone, and there is nothing to be done with it other than learn from it.

In retrospect I can see that in some ways I fell prey to the modern Western myth that materialism brings happiness. There have been cars, lots of cars – mostly new and financed. There has been a lot of skiing, tennis, and general fun. Nothing wrong with that, but the idea that it is my right and that somehow I am owed these things regardless of my budget causes problems. There have been homes bought and then left behind for something bigger and better, with a much larger mortgage. Some of what drove that was a desire to keep up with (or exceed?) those people I knew and spent time with. There was some sort of personal dignity issue tied to our stuff. We were in some ways keeping up an appearance. What no one could see was all of the debt behind the scenes propping up the appearance.

We finally came to our senses around 10 years ago and got out of the appearances game. As a result we have a lot fewer of the trappings of success and a lot more actual substance. I give a lot of credit to Dave Ramsey for giving us the kick in the backside that we needed to realize where all that keeping up of appearances had gotten us.

As I was listening recently to a young couple on the Dave Ramsey show explaining how they got completely out of debt, one of them said she had learned how to be content. I think that is also a big key for us. It is a challenge to be content when you live in a materialistic society where some of the smartest and best educated people in that society get paid a lot of money to make you want the products they are selling. That old car just doesn’t look as good as that brand new luxury car on TV with the big red bow on top.

As we finish off another year and get ready for a new one, ask yourself if you are keeping up any appearances. I have found that it is expensive and burdensome. There is a lot of peace in setting all that aside in favor of contentment.

Let me know if you would like any help in getting started with your own personal Forward Story. I would love to hear from you.

Tweets of the Week: Food, Recipes, Health, Family, & Wisdom

Mark L. Casey — Sat, 18 Jul 2015 16:31:41 +0000

Week ending July 18, 2015

Saturday is a good day to recap the activity from our Twitter feed from the past week. Not sure what Twitter is all about? That’s OK. Neither are we (or at least it remains somewhat mysterious to us). There is no denying, however, that there is some very valuable information shared on Twitter. That is what this weekly feature is all about. Click the links below to check out the good stuff. Here are my Top Tweets from this past week, great for retweeting (whatever that is). If you missed these, follow Forward Story on Twitter.

By the way, if you are wondering what the @ and # signs are all about, these are Twitter’s way to identify the Twitter handle (@) for the person who tweeted (for example, ours is @forward_story) and to allow for an indexing or categorization of the tweet by using one or more hashtags (#). Feel free to ignore these and just follow the link for the content we are sharing with you.

Here are a few recipes from people we trust:

Maria Emmerich ‏@MariaEmmerich Jul 13
Peanut Flour Cake http://buff.ly/1K01ctz #LCHF #keto #lowcarb

Danielle Walker ‏@againstallgrain Jul 12
Dark Chocolate Peanut Butter “Granola” Bars #paleo #againstallgrain #glutenfree http://grainfree.ly/1flgUFD

Russ Crandall ‏@thedomesticman Jul 16
Seared Scallops with Sautéed Kale http://thedomesticman.com/2012/12/18/seared-scallops-with-sauteed-kale …

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Cooking & Kitchen

Colin Champ, M.D. ‏@CavemanDoctor Jul 13
Home Cooked Meals Make You Smarter, Healthier and Thinner http://www.myhealthwire.com/news/diet-nutrition/1080 … via @myhealthwire

Experience Life ‏@ExperienceLife Jul 14
Want to get healthy? Start in your kitchen! says @markhymanmd @mindbodygreen http://j.mp/1GjFbRu #learntocook #MyRevAct #healthyliving

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Health & Fitness:

William Davis, MD ‏@WilliamDavisMD
Novak Djokovic is “gluten-free” but also limits his carbs–I know because I wrote the foreword for his book…. http://fb.me/6EhfpO9pD

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Money & Finances

Rachel Cruze ‏@RachelCruze Jul 14
The Financial Mistake One-Third of Parents Make https://www.yahoo.com/parenting/the-financial-mistake-one-third-of-parents-make-123996068377.html?soc_src=mail&soc_trk=ma …

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Parents and Grandparents

Susan Adcox ‏@grandparent Jul 11
Grandparents, don’t be unwitting drug suppliers: http://ow.ly/PuseU @aboutdotcom

Susan Adcox ‏@grandparent Jul 12
1 in 28 American children has an incarcerated parent. Often grandparents pick up the slack: http://ow.ly/PuR57

Susan Adcox ‏@grandparent Jul 14
Taking the grandchildren on an outing? 3 easy steps for managing their behavior: http://ow.ly/Pzrqh @aboutdotcom

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Wisdom from Seth

Seth Godin ‏@ThisIsSethsBlog Jul 13
Bounce forward http://sethgodin.typepad.com/seths_blog/2015/07/bounce-forward.html …

Seth Godin ‏@ThisIsSethsBlog Jul 16
Seth’s Blog: In search of metaphor http://bit.ly/1HQhFg2

Seth Godin ‏@ThisIsSethsBlog Jul 18
Seth’s Blog: “Because it has always been this way” http://bit.ly/1LtdBIh

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For Entrepreneurs

Abel James ‏@fatburnman Jul 16
14 Entrepreneurs Share Best Advice From Their Fathers http://cr8.lv/1I6mNB6 via @creativelive

Tweets of the Week: Food, Health, Family, and More

Mark L. Casey — Sat, 11 Jul 2015 19:18:12 +0000

Week ending July 11, 2015

We took last Saturday off to celebrate the 4th of July with our family, but we are back today with more great info. Because of the week off, today’s post is a little over twice as long as usual. We found some great stuff on a variety of topics.

Here are a few recipes from people we trust:

Danielle Walker ‏@againstallgrain Jun 28
Homemade Gluten Free Chicken Nuggets #glutenfree #againstallgrain http://grainfree.ly/1JTHC2W

Danielle Walker ‏@againstallgrain Jun 28
Also- in need of pies and cakes for the weekend? These are all grain-free and dairy-free! … http://grainfree.ly/1IDx1VR

Danielle Walker ‏@againstallgrain Jun 28
Black Bottom Banana Cream Pie #paleo #glutenfree #againstallgrain http://grainfree.ly/1IYEu7A

Chris Kresser ‏@chriskresser Jul 7
Five delicious dairy-free ‘milk’ shakes. Cool off and indulge Paleo style. http://bit.ly/1LP1fKT

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Parenting

Great stuff for parents with adult children – 3 Tips for When Your Kids Move Back Home | Rachel Cruze: http://www.rachelcruze.com/topics/kids-and-money/3-tips-for-kicking-out-boomerang-kids#.VZRvRNmGxy_.twitter …

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Grandparenting

Susan Adcox ‏@grandparent Jun 28
10 mistakes to avoid when traveling with grandchildren: http://ow.ly/OT3Th @aboutdotcom

Susan Adcox ‏@grandparent Jul 3
Especially for grandparents: How to keep from going broke in the gift shop. My latest piece for @GRANDMMagazine: http://ow.ly/P9BDz

Susan Adcox ‏@grandparent Jul 5
Help for grandparents who have trouble saying no to adult children. http://ow.ly/PaLmC @aboutdotcom

Susan Adcox ‏@grandparent Jul 5
MT @grandmasbriefs: RT @NBCNews: A widow’s reverse mortgage ‘nightmare’ http://nbcnews.to/1RUhjux

Susan Adcox ‏@grandparent Jul 10
Grandparents have seen this change, and it’s not good! RT @aboutdotcom: Study finds little kids need to exercise more http://abt.cm/1IJtIkt

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Medical, Health & Fitness

Chris Kresser ‏@chriskresser Jun 28
Chronic inflammation is believed to be a major risk factor for #osteoporosis. http://bit.ly/1R6S5c0

Chris Kresser ‏@chriskresser Jun 28
Virtually all skin disorders, including #acne, are inflammatory in nature. http://bit.ly/1LeMPV9

Mark_Sisson ‏@Mark_Sisson Jun 30
Why precommitment beats willpower. http://ow.ly/OZBMs

Amy Kubal ‏@AmykRd Jun 30
The benefits of going for a walk are about more than getting exercise http://www.theatlantic.com/health/archive/2015/06/how-walking-in-nature-prevents-depression/397172/ …

David Perlmutter, MD ‏@DavidPerlmutter Jun 30
Statins reduce libido. Read the science: http://www.drperlmutter.com/study/is-decreased-libido-associated-with-the-use-of-hmg-coa-reductase-inhibitors/ … #brainmaker #grainbrain

Digestible Tips for Staying Gluten-Free On-The-Go – Modern Wellness Guide http://www.modernwellnessguide.com/lifestyle/digestible-tips-for-staying-gluten-free-on-the-go

Forward Story ‏@forward_story Jul 1
This Is Your Body On Sleep Deprivation http://www.huffingtonpost.com/firas-kittaneh/this-is-your-body-on-slee_b_7663702.html …

Amy Kubal ‏@AmykRd Jul 1
Why Body Mass Index (BMI) Is Wrong for So Many People http://huff.to/1H035p0

Abel James ‏@fatburnman Jul 5
6 Easy Tips for Clean Eating on a Small Budget http://flip.it/l22jz

Amy Kubal ‏@AmykRd 7h7 hours ago
This is your body on alcohol: http://drugabuse.com/featured/the-effects-of-alcohol-on-the-body/ …

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Money

Experience Life ‏@ExperienceLife Jun 28
The Mirrors of Your Spending — How our most intimate sense of self & our use of #money reflect each other http://j.mp/1BH9LJw #values

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Wisdom / Productivity

Seth Godin ‏@ThisIsSethsBlog Jun 28
Seth’s Blog: Buzzer management http://bit.ly/1GIZTvB

Michael Hyatt ‏@MichaelHyatt Jun 30
Why You Should Flush 90% of Your To-Do List Down the Toilet http://mhyatt.us/1ol0bFb

Experience Life ‏@ExperienceLife Jul 7
New job jitters? How to settle in with minimal stress — http://j.mp/1KKe8Xh #worklife #balance #stressmanagement

Tweets of the Week: Recipes, Health, & Wisdom

Mark L. Casey — Sat, 30 May 2015 10:00:05 +0000

Week of May 24, 2015

Here are a couple of recipes from Maria Emmerich, a master of gluten-free and low carb cooking:

Low Carb Pancake http://buff.ly/1Aq7DWf

Fudgsicles http://buff.ly/1IVmf0L

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Some great information related to health:

A Hedge against Drought: Why Healthy Soil is ‘Water in the Bank’ https://shar.es/1rFlGK

I know it’s counter-intuitive: Why People Who Sleep Longer Achieve More http://mhyatt.us/1wSPmLK

When Daily Life Is Exercise, Everywhere Is the Gym http://www.cavemandoctor.com/2015/05/19/when-daily-life-is-exercise-everywhere-is-the-gym/

“Food should not contain ingredients, it should be an ingredient.” http://bit.ly/1Ap712w

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A little wisdom from two great sources:

New Podcast Episode: The Secret Power of Smiling http://mhyatt.us/1HL5lQY

How to Run a Debt-Free Business Without Running Out of Cash [VIDEO] http://bit.ly/1AhZZgg

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Great flood safety tips:

5 ways you can be ready when a flood hits: http://abt.cm/1PNgR5m

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Seth Godin is always thought-provoking:

Seth’s Blog: The do over – http://bit.ly/1IXiOrS

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Here is a wonderful article from Susan Adcox that speaks to grandparents helping their grandchildren cope with cancer:

When a family member is diagnosed with cancer, grandparents can help grandchildren cope: http://ow.ly/NwFc2

How to Find Your Dream Job

Mark L. Casey — Tue, 27 May 2014 19:20:44 +0000

This is graduation season. A lot of freshly minted graduates are streaming out of our colleges, high schools, and technical programs. A lot of new graduates are looking for their dream jobs.

How do you find your dream job?

I want to share some insight from a good friend of mine named Bill Martin. Bill is an octogenarian with a lot of wisdom. If I told you his entire career history you would be amazed at this man’s success. If you could meet him, you would be amazed by his humility and charm.

He recently spoke to engineering graduates about how to find their dream jobs. Here it is in all its wisdom and simplicity:

Get a job. Work hard and do great at it.
Get a better job. Work hard and do great at it.
Keep repeating this until you…
Get your dream job.

I sort of understood this when I was young. I did not expect to have a dream job right out of the gate. I knew it was out there if I worked and produced value for my employers. A job well done leads to a recommendation and to advancement. The idea of an entry-level position is that you do not stay there long. It is simply where you enter.

In your pursuit of a dream job, don’t forget to get a job and do really well at it. That will lead to good things.

Thanks, Bill!

How to Eat on a Budget

Mark L. Casey — Fri, 11 Oct 2013 12:21:53 +0000

This relates to our general topic of Forward Story because one realm of life we all have to consider is the realm I call Business. Part of the Business realm is Money. Learning the skills required to successfully handle money takes effort and focus. If you do not care about mastering your money, you never will. My wife and I squandered more money than I want to admit because we did not know what we were doing and because we had developed very bad behaviors.

We recently had a discussion with our college student son about money and about how to create and live on a budget. A budget is nothing more than a spending plan. It is a document that we create to define how much income we expect in a given time period and what we expect our expenses will be in that same time period. Both the income and expense side of the budget need to be as accurate as possible.

In any budget there are some expenses that we know are not going to change. For example, the rent or mortgage is well defined. Your landlord is not going to call you this month and tell you the rent is a different price. There are other expenses, however, that will fluctuate. In our budget we identify several expenses that can fluctuate but that we want to really control. If we do not control these expenses, they will kill our budget and turn it into a fantasy instead of a guide. For these expenses we use a control technique that we learned from Dave Ramsey called the envelope system. Dave says he learned it from his grandmother. This is one of those cases where “old-fashioned” really works.

For the envelope expenses that we need to control, we go to the bank and withdraw actual cash. This cash gets inserted into literal envelopes with the name of each expense written on it. In our case we use envelopes labelled with the following categories:

Food
Gas
Clothing
Entertainment
Blow Money

We then purchase these items with cash only, and when the cash is gone we stop spending on those categories Simple, powerful, and effective.

You may be arguing with me about this approach or justifying your other way of doing things. I understand. I resisted as well until I learned the freedom that this brings. Let’s take a closer look at how this works with a budget category that gives a lot of people trouble: Food.

Example: Imagine that you have done your budget for the month and determined that you will spend $450 for food this month. You go to the bank and withdraw $450 (or you may do this on the 1st and 15th of the month and withdraw $225 each time).

This $450 must last until next month. Is this enough money for you? We will assume 30 days for this month. This means you have budgeted $15 per day for food. In my world that would be very tight. To break it down into breakfast, lunch, and dinner, this means I could spend $5 on each meal. That’s a lot more “value menu” than “gourmet restaurant.”

Actually to me a food budget is neither fast food nor gourmet restaurant — at least not much of either. Before I share some techniques that help us stay on track, let me say that our goal in food is to eat as healthy as we can while still staying within our budget. We value our health and want to eat good food that we enjoy and that fuels us for life. For us this implies going to the grocery store or market and doing a lot of cooking. I will leave the issue of what “healthy eating” is for another time. I have my view, but there are plenty of different approaches to this.

If you do not cook at home, you are going to have a really hard time not overspending on food. “But, but, cooking at home is hard. ” I know. So is running out of money because you do not cook at home. Here is the way we make this work.

We commit to eating almost all meals at home. We have nothing against restaurants and we do eat out a few times per month. But we simply cannot make our food money last if we are paying someone else to do all our work for us. When you buy food at a restaurant you are paying for many things: the food itself, the labor of the cooks who prepared it, the electricity and water required to cook it, the property costs of the restaurant, the labor of the food runners who bring it to you, the restaurant’s marketing, the insurance they have to pay, your server’s labor, etc. All of these costs can be called “value add.” In other words, you have to pay the restaurant for the value they add to the cost of the food itself. These are legitimate costs, but I cannot pay them constantly and still stay in budget.
We plan our meals for the week. In order to avoid restaurants and do our own cooking, we have to do some planning. We use Evernote to plan our meals, but a yellow legal pad will work just as well. We just list the days and dates and determine what we want to eat for dinner each night. We try to plan meals that will produce some leftovers for lunches. If we plan to eat out, we write that on the plan as well for the selected night. One more tip here is that we use Evernote for our favorite recipes. We are constantly adding new recipes to our favorites. This makes it easier to create variety in your meal plans.
We build our grocery shopping list from our meal plan. Once we know what meals we are going to cook, we can begin building our grocery shopping list. Again, we use Evernote. We break the list into the general grocery store sections: Produce, meat, dairy, baking, frozen, household, etc. We scan the recipes for the meals we have planned to cook and add those ingredients into the shopping list.
We take cash from our envelope to buy food. I take my cash, my iPod with music and podcasts, my pen, and a printed copy of my list.
We keep a running total while buying food. My chief objective is to be sure I know that I have enough cash when I get to the register. My little trick for being sure is that as I am shopping and crossing items off my list, I keep a running total of what I have spent so far. If the butter is $3.78, I round it up to $4 and add $4 to my running total. This ensures that the actual cost of the food at the register will be a little less than my final running total. That keeps me stress-free.
We learn while cooking. Look, I know that not everyone enjoys kitchen time. My wife and I both do, but not everyone does. One way to transform this mundane task into something useful is to listen to music, an audio-book, or a podcast while cooking. This has been a big help to me.
We stay on top of the dishes. When you cook at home, you will create dirty dishes. One of the keys to being able to have an efficient kitchen, and therefore to be able to stay on budget with our food, is to be sure to stay on top of the dishes. Again, I do this while listening to something on my iPod. Between my wife and me, our goal is to have the dishes all washed before we go to bed and then put them away into their places the next morning.

There are thousands of variations on our practices, but I do believe that if you follow this process, you can make it on your food budget, assuming it is at all realistic.

What do you do in order to not overspend on food?

Mind-Mapping the Nearer Term – Adding Age 25

Mark L. Casey — Tue, 10 Jul 2012 16:03:47 +0000

In our last article our 18 year-old John completed his mind map for the time-frame 12 years down the road when he is 30 years old. He put in writing in his mind map his various dreams and goals across three areas – family, career, and personal. However, there is a large gap between where John is right now at 18 and where he wants to be when he is 30. Now comes a crucial step for John. He must answer the question, “How do I get there from here?”

When we introduced John in this series we identified the time-frames that he will plan for. The exact time-frames are flexible and can be defined as John desires. The most important thing is that these time windows make sense to the person creating the mind map – in this case John. Here is the mind map we laid out for John: (all images will enlarge when clicked)

With his age 30 mind-map completed, the next time-frame for John is the next seven years. At the end of that window he will be 25 years old. This period is exactly five years before the age 30 period he has already completed. With each new time period, John has to review the plans he has already written to make sure that what he plans in this new time-frame truly enables him to accomplish what he has already written in his longer time-frames. For example:

Family. John wants to be living near his parents when he is 30 in order to be able to take care of them. The likelihood of that happening will depend in large part on John’s decisions by age 25. He has to make sure that this new time-frame takes location into account.
Career. John said that when he is 30 he will be in his 7th year of work as an engineer. In order for this to happen, John needs to have already been an engineer for two years by the time he is 25. If he were now to write that by age 25 he wants to start his first job as an engineer, there is no way he will be in his 7th year of work when he is 30. This is why he must review what he has already written.
Personal. Since John wants to be under 190 pounds by the time he is 30, he will want to make sure he is setting a realistic goal for his age 25 time-frame with regard to his weight and health. If he does not pay attention to his weight and instead gains weight in his early to mid twenties, John may have weight problem to deal with when he is 30.

In this way John reviews what is already planned in longer time-frames and begins to write a coherent plan for the shorter time-frames. It is important to note that John’s already completed age 30 plan is not chiseled in stone. In working on an earlier time-frame he may discover that something he has written for age 30 cannot be accomplished by that time. OR he may determine that he has been too conservative and that he can really accomplish more in that more distant period. In either case he will need to go back to age 30 and make changes so that his plan has a realistic shot of success. In this way, the entire process is really an iterative process. That is, it will likely take several iterations (or repetitions) to develop a coherent plan.

Back to Age 25

After reviewing his age 30 mind map, John will now begin writing for age 25 across all three realms. Here is the blank template for age 25 with the familiar fields to guide John in his planning.

Since John has already completed his more distant time-frame, he can more easily step back in time and create his goals:

Family

Family Status: Mom & Dad 62, Steve 27, Jane 24, Kate 20
If we are not already living near Mom & Dad, we will look for career opportunities to move closer.
Steve may have children by this time, and it is important to me to be a good uncle to my nieces and nephews. This is true even if we do not live near one another.
I will have contributed my love and help to Jane and will have a healthy, supportive relationship with her as an older brother. I will maintain healthy boundaries.
I will continue my strong relationship with Kate and assist her in whatever ways she needs me.
I may be an uncle to Jane and/or Kate’s children at this point. As with Steve’s, I will invest in these nieces and nephews and be a wonderful uncle to them.
Robin and I will be celebrating our third anniversary.
I will support her in her career, life, and interests.
I will spend quality time with her and work seriously on making our marriage great. I will invest in us.
We may have children by this time. I will take fatherhood seriously and will look out for the well-being of them all.

In reviewing his age 30 map, John notices that he failed to say anything about his in-laws in what he wrote about family. He address this now in the new time-frame by writing:

I will make it easy for Robin and the kids to spend time with her parents.
I will look for ways to help Robin’s parents.

Also, now that John has identified this oversight from the age 30 plan, he will go back to that age 30 map and add his thinking about his in-laws.

Career

I will be in my 2nd year of work as an engineer.
I will establish a reputation as a person with a strong work ethic.
I will cultivate relationships with engineers I admire in order to learn from them and grow my network.
I will look for and participate in continuing education opportunities.
I will earn at least $60,000 per year.
We will practice wise budgeting and will pay off all student loan debt.

Personal

Body/Health

I will keep my weight under 190 pounds.
I will play tennis and walk regularly.
I will eat a healthy diet, and continually educate myself about the latest in nutritional science.
I will get annual physicals from my doctor.

Fun

I will take guitar lessons and review the fundamentals of music.
I will play in at least one charity golf tournaments each year for fun and to support good causes.
I will hunt annually with my Dad and brother.

The World

I will explore various charities and volunteer my time to determine the place I am most passionate about serving.
I will explore the mentoring a young person through Big Brothers/Big Sisters.
I will financially support humanitarian relief efforts through world-class charities.
I will vote in local, state, and national elections as an exercise of my civic duty and of patriotic gratitude.

Spiritual

I will continue to learn and explore my own spiritual nature and the nature of God.
I will focus on my spiritual journey with my wife and grow along with her.
I will explore and identify a good group of people/church to belong to and to do spiritual work with.
I will strive to be consistent in my religious beliefs and allow them to guide my actions in work and personal life.

Here is all of this information in the mind map for age 25:

When both the age 25 and age 30 map are included, here is John’s map. Remember, this image will enlarge:

Now that we have gone through two different time-frames for John we can begin to understand the process for doing a complete mind map. I think you will agree that it is actually hard work. We have not even completed John’s plan yet for his two closest time-frames. One thing that will emerge as we look to the closer time-frames is that the specific goals will become more like tasks as he begins to realize actions he will need to take to make his longer vision a reality. In our next article we will examine how the closest time-frames will drive John’s actions.

Getting Personal About Forward Story Through Mind Maps

Mark L. Casey — Thu, 14 Jun 2012 02:44:30 +0000

This article is part of a series that began with “Using Mind Maps to Develop Your Forward Story.” We have used fictional 18 year-old John as an example and have started building his Forward Story by using the creative tool of mind mapping. In the last article we continued looking at John in twelve years when he will be thirty, and we focused on his career realm. He defined his career ambitions in light of his commitment to his family. As a reminder of where John is so far with his age thirty mind map, here is the map with those two realms completed. (All images will enlarge when clicked).

John has set some excellent goals for when he is thirty. The statements contained in each branch feel right to John. He gets excited thinking about it. The old saying goes: “All work and no play makes Jack a dull boy.” John wants to be a mature adult, but he also wants to have some fun. He does not want to be a dull boy. He wants to enjoy life and to live in a meaningful way. So the next realm he will think about is what we will call the Personal realm. We include in this realm body, health, fun, the world, and spirituality.

Body/Health

John knows that thirty is still young, but he wants to take care of his health so he will be able to handle all of the other goals he has already chosen for himself. If he gains a lot of weight, develops diabetes, and suffers from heart disease (like his father has), he may not be able to take care of his parents, siblings, nieces, nephews, or his wife. He has seen this happen to other friends and family members, so he is determined to make his health a priority. John writes the following statements:

I will keep my weight under 190 pounds.
I will exercise at least three times per week.
I will eat a healthy diet, and continually educate myself about the latest in nutritional science.
I will get annual physicals from my doctor.

For fun John really likes playing guitar. He is currently a novice, but would like to be much better in twelve years. He knows he can do it, so writes the following about guitar and other “fun” activities:

I will be able to play guitar for my family and friends without embarrassing myself.
I will play in three charity golf tournaments each year for fun and to support good causes.
I will hunt annually with my Dad and brother.

Also in this personal realm, John needs to think about the larger world in which he lives. He is aware of people in other places and of his responsibility as a citizen of his own country. He writes:

I will regularly volunteer my time to help with our local food pantry.
I will mentor a young person through Big Brothers/Big Sisters.
I will financially support humanitarian relief efforts through world-class charities.
I will vote in local, state, and national elections as an exercise of my civic duty and of patriotic gratitude.

Finally, John will address spirituality. He is not quite certain where his spiritual life will take him, and he has a lot of questions. John considers himself a seeker after spiritual truth, so he has some expectations that by age thirty he may have found some answers to his questions. He contents himself with the following for now:

I will have an understanding of my own spiritual nature and the nature of God.
I will continue my spiritual journey with my wife and grow along with her.
I will find a good group of people/church to belong to and to do spiritual work with.
I will strive to be consistent in my religious beliefs and allow them to guide my actions in work and personal life.

Putting all of this together into his mind map, here is what John’s personal realm looks like at age thirty:

John’s final mind map for age thirty is pretty busy. Here is what it looks like all put together:

This branch of John’s map represents a lot of hard work in thinking, visualizing, and writing. As good as this is, this is what John envisions his life looking like in twelve years. In order for this to be more than a fairly tale, he has a lot more work to do to bridge the gap between now and then. So, as a reminder, the thirty year branch is only a small part of John’s overall mind map. Here is a visual reminder of what is left to define:

In our next article we will look at the way John’s closer timeframes relate to this age thirty branch.

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Here are a couple of recipes from Maria Emmerich, a master of gluten-free and low carb cooking:

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What do you do in order to not overspend on food?

Mind-Mapping the Nearer Term – Adding Age 25

Getting Personal About Forward Story Through Mind Maps

How do you think John’s completed branch will affect his thinking about the next few years of his life? How is it likely to impact his behavior?