Last week I wrote to you about a few financial conversations worth having within a marriage, or any close partnership.
As we turn the page into the end of summer, there are a swath of newlyweds out there, and this (and the previous note) might be something useful to send their way.
But before I get there, a word about a different sort of exercise, one which I commend to you.
Take the last two weeks of summer and give yourself a politics cleanse.
Because of the work we do around here in Long Island and Stamford, we have to pay attention to the news media, at least as it revolves around tax policy and financial markets, etc. But that doesn’t mean we have to like it.
The nation seems to be simmering in a frying pan of collective angst. Whether your politics are left or right, there are so many sources online and on television whose sole purpose is to gin up frustration, anger and chaos. In the ever-increasing arms race for clicks and eyeballs, the media and prominent social media voices have discovered (some time ago) that chaos and anger sell.
But you would be amazed and gratified to discover that taking even just a couple weeks — say the rest of the month of August — away from ANY political news, that not much will have changed in your absence. The only thing that is certain to have shifted would be your peace of mind and your mindset.
So, as one friend to another … consider unsubscribing from the political emails, NOT clicking on that article your friend posted in order to stir up frustration or to rally the believing troops, and perhaps even taking a full break from any of the major news sites or 24-7 “news” channels.
Try it for two weeks. See what happens. Let us pay attention to the important financial news, and keep your head clear from the rest. Your soul might thank you.
But back to the topic at hand. I don’t pretend to be a marriage guru, but we have lots of couples stream through our doors, and there are certain commonalities among those whose partnership reflects a strength within their financial house.
A Family Budget Plan By Michael Kessler
“Don’t just count your years, make your years count.” – Ernest Meyers
In my previous note, I wrote about some “big picture” exercises to have with your partner, or for your own financial reconfiguration.
Those were: 1) Writing Your Money Story and 2) Imagining Your Ideal Financial Scenario. Both of these exercises were to lay the foundation for getting practical — because the practical outworking that comes from these exercises is where steady foundations are built, or becomes the place at which change actually occurs.
So, this is a small bit of practical advice, building upon those first exercises…
Create Your Family Budget Plan Now
As a couple, begin with the assumption that you will pool your money.
Couples enjoy an economic bonus because two can live more cheaply than both could alone. However, do not expect to achieve financial peace without a plan!
I highly recommend that you plan to live on one salary for the first several years. This is a challenge that too few couples in Long Island and Stamford accept. If you max your lifestyle to pay for a mortgage, car payments, gym memberships, and the like, you will have no flexibility to adjust when children come. Your first years of marriage offer a great opportunity to save for an emergency fund and a down payment on your first house.
Start by tracking your current expenses to give you a starting point for creating your own budget. Budgeting is like healthy eating. You need to maintain balance and avoid excessive indulgences.
Going through this exercise will likely reveal who has the greater interest in paying the bills. Even when only one of you will be paying the bills, you can only build trust if you decide together how your money will be spent.
Don’t forget to allocate some savings. After all, as I’ve written, wealth is not what you spend but what you save and invest.
Now you can build a financial fortress that re-writes your story, and which takes you to the place of your greatest hopes.
And remember: we are in your corner.
Until next week,
Michael J. Kessler, CPA