When my wife, Jenn, and I began our budgeting journey, we discovered a magical ingredient for achieving financial success: working together. I want to share the benefits we’ve enjoyed since we started “working together to win with money.”
Benefit #1 – We BOTH know our financial situation.
Before Jenn and I started working together on our finances, there were a lot of episodes of unplanned spending. As a result, we would run short of cash at the end of the month and cover those shortages with credit cards. Because neither of us truly understood where all of our money was going, it led to additional financial mistakes. These would lead to unnecessary stress and frustration. It also resulted in an average bank account balance of $4.13. Since I am an eternal optimist, I would say, “Hey! At least the balance is positive and not negative!” We later realized our financial behavior was robbing us of our future hopes, plans, and dreams.
In December 2002, we had our IHHE Moment (I Have Had Enough Moment) and said, “enough,” and stopped spending money in a wild manner. By July 2003, we had formalized our spending into a monthly spending plan (A.K.A. a budget). Ever since then, we have planned each month’s spending. The result? We have been debt-free (except the house) since February 2004. We have achieved many of our life dreams and we both know our financial situation.
Keys To Obtaining Benefit #1
** Prepare a written spending plan every single month. Visit here for a free budget template and this post, “How Do I Budget?”
** This monthly rhythm will create a natural space for you to have conversation about your finances. Since nearly everything in life costs money, it will allow you to have a conversation about the more important things of life too. This is perhaps the most powerful result of preparing and following a monthly budget.
** If you have a financial mess, it is time to have an IHHE Moment
** This is the moment where you say, “Enough is enough.” It is a definitive moment where the pain of keeping things the same exceeds the pain of changing. This is a vital component of every financial turnaround as it provides energy and passion to help you power through the challenges of changing old financial habits and behavior.
** Take the time to talk with your spouse about your hopes, plans, and dreams – and write them down!
** At least once a year, you should have a focused conversation on your plan’s hopes and dreams. The dreams you share as well as your individual ones. This can be a wonderful time of hope and challenge that helps you remain committed to positive financial decisions.
Benefit #2 – Improved communication.
When Jenn and I were B-R-O-K-E and constantly spending money we did not have, we really had no idea where our money was going. All we knew was this: it was leaving at a very rapid pace. By working together to win with money, our communication changed dramatically. I now know when each of my nephews and nieces have a birthday because we send them money. We can’t just magically produce the money we send them every birthday. It must be planned. Through this rhythm of monthly meetings, these gifts are carefully included into our monthly spending plan while also having a wonderful conversation about each beloved family member who is turning another year older. We also discuss our future plans, hopes, and dreams. We talk about which dreams will be funded now and which ones will need to be funded later.
Together we made a decision to fund college education for our three children. We fund that education every single month. In January 2003, we agreed together that this goal was extremely important to us and we made it a priority. We both have a desire to travel around the world. As such, we made a decision that most of these travels will be funded in the future, not now. However, we have focused on funding a few trips right away. We typically take a family vacation each summer where we tour several states and visit family. Living in South Carolina, we also love visiting the beach. Because of this, we have made beach trips a priority. These trips are funded monthly because they are included as an expense in our monthly budget. This allows us to pay cash for each trip without any debt following us home.
This all happens because of one key reason: we have agreed together to sacrifice other items in order to fund each of these higher priority goals. Because of our improved communication, we have been able to give more money to causes and people we believe in. To put it very plainly: there is no possible way we are ever going back to our old way of money (mis)management. Our marriage has been vastly improved by the fact that we are working together to win with our money.
Keys to Obtaining Benefit #2
** Understand each other’s plans, hopes, and dreams.
** Few things are as satisfying as setting a goal and achieving it with the one you love. Have you written down your plans, hopes, and dreams? What about your spouse? How long has it been since you allowed yourself to dream?
** Take time to develop a written spending plan together. Free budget tools are located here.
** Let’s face it. Budgeting is not the most exciting task you will undertake on any given day. However, when you realize that your budget, and the process of preparing it together with your spouse, is the critical and vital tool that will maximize every dollar and enable you to achieve the huge plans, hopes, and dreams of your life, you might discover that you suddenly enjoy this process in a way you did not think was possible. You will be spending your time working together to win with money.
** Plan your spending every single month.Ensure that you are funding at least one of your dreams at all times.
** Have you noticed how fast time goes by? My firstborn was just entering kindergarten and now high school is already in her rear-view mirror. If you do not commit to preparing and following a budget each month, you will seemingly blink and a year (or more) will pass. Mark my words, any month you allow to pass without preparing a plan is a month you did not maximize the impact of your money.
** Become debt free. Calculate your Debt Freedom Date.
** Have you ever known anyone who said their credit card debt was the reason for their financial success? Probably not. The same can surely be said for furniture debt, student loan debt, and owing a friend or family member. We all understand that debt is not all created equal. Credit card debt is wildly different from a home mortgage. But consider this thought: What would your life look like if you owed zero debt except your home? What if you were completely debt-free, including your home?
Benefit #3 – Dreams Get Funded!
By working together to win with money, many of our dreams have been funded. We have had tons of dreams. A new kitchen with granite counter tops, a new master bathroom, paying for our kids’ college education, paying cash for our kids’ first house, giving away $1,000,000, starting a university, living for a year in downtown Chicago, traveling to Australia, Europe, and Asia, owning a 100 acre farm … Quite frankly, the list of dreams goes on and on. However, because we have talked about them and prioritized them, many of them have been fully funded. In fact, it is my belief that one hundred percent of the above goals will be funded during our lifetime.
Why do I believe that?
Because we have funded so many of our dreams already. Many of them were dreams we did not think were really possible when we first discussed them. It is amazing what happens when you have a financial plan and work together to win with money. If we fail to achieve all of our dreams, so be it. It will be a blast knowing we gave our best effort together!
Keys to Obtaining Benefit #3
** Remove all distractions and take the time to have a great conversation about your plans, hopes, and dreams.
** Children are wonderful and beautiful, but there are some conversations that are better without their constant input (or interruption). One of these includes the conversation about your plans, hopes, and dreams. Schedule your conversation so you can ensure a distraction-free environment for this most important of discussions. For example, Jenn and I scheduled a three-day getaway to Charleston, SC to update our plans, hopes, and dreams. It was a wonderful time and we came back with a new perspective and dreams.
** Ask these questions of each other: Will these dreams cost money? How much? If we continue to manage money the way we are right now, will we be able to achieve these dreams? What is your most important dream? How can we start funding it right now?
How Working Together Has Helped Us
Ever since our IHHE Moment back in December 2002, Jenn and I have taken our financial decisions much more seriously. The addition of a budget greatly accelerated our financial success. By February 2004 (just 14 months later), we were debt-free except for our home. We have been able to launch and purchase eight companies, acquire the farm, and invest in rental real estate. At this moment, our oldest daughter is nearing completion of her college journey with zero debt. We are so grateful for the journey and the blessings we have experienced. It is our mission and goal for you to enjoy the same success. We truly believe it is possible for you to live your own Fully Funded Life! You can do this! We believe in you.
After more than 25 years of managing money, I finally took time to write about the profound impact that one’s plans, hopes, and dreams can have on your financial behavior. I have entitled the book, 20/20 Money: Gaining Clarity for Your Financial Future. Included within this book are 22 Vital Questions you should ask to help discern and fully understand your own plans, hopes, and dreams and just exactly a Fully Funded Life looks like for you.