02/10/2025
Are You Ready for “The Good Life”? 2 Tools to Achieve the Good Life This Year
Can you use a metric like a break-even to have a good life?
In "The Good Life," Robert J. Waldinger says, "The clearest message that we get from this 75-year study is this: Good relationships keep us happier and healthier. Period"
This is a great exercise I do every year. Once you have the metric of a Break-Even, then you know whether you’re winning or losing each month. Yes, I mean exactly how much money you need each month to pay all your necessary expenses. But I’m also referring to a relationship Break-Even. That way, you know each month if you’re ahead or behind. If you’re stable financially then you can convert some of that money time to the family time Break-Even.
This can be a measure of the necessary time you need to maintain a healthy relationship with your spouse, to be a good parent to your children, to be a good son or daughter to your ageing parents. Start with a Break Even.
As we step into a new year, it's a great time to pause and plan for financial stability and emotional wellbeing. We need to bank not just money, but relationship equity. Whether you're a small business owner, a solo attorney, or a dedicated parent managing a household, creating a break-even plan can help you navigate the year with confidence. Here are some practical steps to get you started:
List The Necessary Outflows
List all of the recurring expenses you have, include things you need to pay for like rent, or mortgage, food, etc. for each month. You should include some savings and retirement, perhaps if you’re saving for a house or other long-term goal. This will show you your financial Break-Even.
For example, if all of your monthly expenses equals $6500, then if you have more money than that at the end of the month, you have profited.
Then make a similar list of all the important necessary relationships, and the minimum amount of time needed to sustain them.
Then make an Ideal Calendar showing the days and times each month you will do the things necessary to make the money you need, and sustain the relationships you need.
For example, Parents – consider what the minimal time you need to spend to help your child at her or his age to maximize the potential they are expressing. Once you know that then make an ideal calendar.
The Ideal Calendar shows the daily, weekly and monthly recurring events you would include if your calendar could be Ideal. Make sure you include that Break-Even time you calculated for your children. Once you know your Break-Even, you can see each month how you have exceeded it. Or if you have a particularly trying month, what makeup time you need to put in next month.
Set Clear Goals
Define what breaking even means for you. This could be covering all your expenses without dipping into savings or achieving a specific revenue target. Setting clear, realistic goals will give you a roadmap to follow throughout the year.
For relationships, once you know your Break-Even (sustaining the closest relationships), you know when you’re achieving more. Is it a goal to repair old friendships? Get to know a co-worker who you suspect is in need?
Plan for Unexpected “Expenses”
Life is unpredictable, so it's important to have a contingency plan. Set aside a portion of your budget for unexpected expenses. This could be an emergency fund for personal use or a reserve fund for your business. Expect a portion of your time also to be usurped by life’s vicissitudes – an unexpected funeral, or a wedding invitation or birth announcement.
Leverage Technology
Use financial and time management tools and apps to help you stay organized. There are many options available that can simplify budgeting, track expenses, and provide insights into your financial health. I use calendaring tools to create an Ideal Calendar, and then match my actual appointments each month to the Ideal to see how closely I came. How many new client appointments did I have? How many phone calls with my kids? Time with my wife? My siblings?
Once you have that metric – the Break-Even, you can see each month how well you’re doing.
Seek Professional Advice
If you’re not sure what your financial goals should be don't hesitate to seek advice from financial advisors, accountants, or legal professionals. They can provide valuable insights and help you make informed decisions.
Reflect and Adjust
Each week, month, and quarter, you should look at the period that just passed to see how close you came. Are you winning or losing? And make adjustments to your Ideal Calendar moving forward.
At the end of each period, take time to reflect on your progress. Are you meeting your financial goals? If not, what adjustments can you make? Regular reflection will help you stay on track and make necessary changes to your plan.
Celebrate when you’ve exceeded your break-even each week, month or period in which you have exceeded it.
Consider Personal Break-Even Metrics
Remember this exercise isn't just about finances. Think about the time you need to maintain healthy relationships with your spouse, be a good parent to your children, and support your aging parents. Knowing your break-even point in terms of time and energy can help you balance your personal and professional life more effectively.
Conclusion
There’s an old saying that if you have no goal, you cannot know if you are achieving it. Using a metric, like a break-even and tools like an Ideal Calendar can help you achieve the goals of Financial Stability, and, perhaps as Waldinger and Schulz’s book suggests, a “Good Life” through healthy relationships.
