finance

Good Problems To Have

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It’s been two years since I found my budgeting rhythm and achieved the goal of tracking and planning expenses. That’s why I had tax payment as an item in my annual budget planned and ready to go. Like every April, I filed my taxes for last year a couple of weeks ago, only to discover that my due tax amount doubled compared to the previous year because my income improved and, of course, due to the crazy local tax jumps we have.

At first, I was mortified; I felt it was unfair for a third-world resident like myself to pay this much tax. Then I remembered a reading from the Daily Stoic; which said:

“You think you’re so special? People have been complaining about their taxes for thousands of years, and now they’re dead. Get over it. This is a good problem to have. Far better than, say, making so little there is nothing left to pay the government.

Income taxes are not the only taxes you pay in life. They are just the financial form. Everything we do has a toll attached to it. Waiting around is a tax on traveling. Rumors and gossip are the taxes that come from acquiring a public persona. Disagreements and occasional frustration are taxes placed on even the happiest of relationships. Theft is a tax on abundance and having things that other people want. Stress and problems are tariffs that come attached to success.”

I also felt grateful (it took a while) for the idea that more taxes means more income. I get to pay taxes. Just like I improved my income last year, I can do it again. This year, however, I will be smarter, keep a tax calculator handy, and budget better for next April.

My favorite sentence in the quote I shared from the book is, “Tax is a good problem to have.” Jon Acuff reminded me of the same idea in one of his courses: Sometimes, we avoid starting a goal because we are worried we will be unable to handle the “problems” resulting from our success. 

Examples of good problems to have:

  • Clothes that get too loose after you lose weight.
  • You’re in high demand to speak at events because you’re excellent at public speaking.
  • Your shop stock might sell out because of the outstanding quality and marketing, and you would apologize to potential buyers.

Yes, you may still need to gain a new skill set to handle your anticipated great success, but you are also growing, learning, and changing every day and acquiring knowledge and experience that will help you solve anything you might face.

Don’t let worrying about the good problems be an excuse for not starting goals. Having good problems means you have succeeded in achieving your goals. Most importantly, trust yourself. You can handle good problems just as you can handle bad ones.

Good Problems To Have

The 101 to Personal Budgeting

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How many of us really know what goes on with our money? For some people, our money is like an airplane black box. It’s a just a mystery to us. If we were to live successful lives we need to work on our finances and the first step in this journey is learning how to create a budget.
Yesterday I hosted a Live session with the super money coach Christeen Haddadin for the second time, where she shared with us a step-by-step guide to budgeting.

Highlights from the Live:

  1. We need to change our mindset about having a personal budget, budgets will free us up, not limit us. They will put us in charge of our money instead of having our money run itself, which means we would run out of it needlessly.
  2. Creating a budget is setting jobs for every Dinar we make. These jobs will help us cover our expenses on nonnegotiable needs, and also differentiate them from wants that we could do without.
  3. We start a budget exercise by adding up our annual income including bonuses, and any planned returns we expect. In case it’s a non-fixed income, we look at last year and take 2 scenarios, the average monthly income and a more conservative one based on the income worst 3 months of that year.
  4. We lay out our fixed monthly expenses like rent, car fuel, groceries, phone bill.
  5. We lay out our quarterly/semiannual and annual expenses such as car license & insurance, family birthdays, tax, life insurance and so on, and let’s call these the annual payments
  6. We save money every month to the above account of annual payments, so we would not be shocked when it’s our daughter’s birthday again, and we need to spend money on a little party for her. Example if we have car insurance of 500$ due in June we need to save 100$ every month from Jan-May to the annual payments account in order to be ready to seamlessly do the payment in June.
  7. It takes time to build an emergency fund, and it’s up to us to decide how many months it should cover, 3, 6 or even 12 months. It depends on the stability of our income, the less stable, the higher the emergency fund needs to be.
  8. We also talked about bad debt and good debt, where good debt is what you pay for assets like mortgage or land. Bad debt is what you pay for consumer loans like car loan or credit card interest rate. We need to check online debt calculator to see how much interest we are truly paying and look into increasing our monthly payments to reduce the interest amount that we are paying.
  9. Last tip we discussed was about engaging with our money on a daily basis, especially since most of us are not using it in cash, by logging in to our bank applications and checking the status of our accounts.
The 101 to Personal Budgeting