How to Manage Money
These are the best ways to manage money that I have learned. Some are tips and techniques how to manage and money more effectively and efficiently
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After writing about my favorite free budgeting software, I couldn’t include Quicken Online because they charged $3 a month. Starting today, they are doing away with the fees and making it a free service. I hadn’t yet tried them out, so I figured now was as good a time as any since they are free.
ING Direct works with Quicken Online
I have always been impressed with Mint and Wesabe, but I wasn’t able to get either one of them to work with my bank (ING Direct) and credit union. I kind of decided that if I were going to use a financial tool like these, that it would have to handle everything, or it wasn’t worth my time and energy. So, since Mint and Wesabe, were never up to the challenge for my accounts, I was pleasantly surprised to find out that Quicken Online actually handled both of my banks very well.
Just by being able to import my bank data automatically, I am instantly a huge fan of Quicken Online. If I had known that it would have done this from the beginning, I would have gladly paid $3 a month for it. And even better is the fact that it is FREE!
Playing with Quicken Online
After spending about an hour with it, I am excited about it’s possibilities. A few of the features I like so far…
- Just like most of these tools, it allows you to define each store’s transactions to fall into a specific category
- Once you have added those, it allows you to get a nice birds-eye-view at your spending
- Bill reminders
- Allows you to set budgets for each category - so then you can check to make sure you aren’t overspending
- It calculates a rough estimate of your Net Worth for you - it’s accuracy depends on how much info you provide.
There are lot more features that I haven’t dug into yet, but all in all, I would say that since Quicken Online is free, it is worth trying.
Has anyone else been using it or tried it yet?
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A reader recently asked me if I knew of any good and free budgeting spreadsheets. Personally, I love Excel and get a kick out of building spreadsheets, but I know not everyone is as interested in that as I am 
.
Each one of the sheets below are free and are designed to be used with Excel, but will more than likely work if you use OpenOffice (basically a free version of Microsoft Office). Some may also work with Google Docs, but I have had bad luck with some of my imports into Google Docs.
Each of the budgeting sheets below have their own strengths and weaknesses, so give try them out, see what works, and make tweaks and changes if necessary. If you have a spreadsheet that you have built or have found (that is free to distribute) please provide a link to it in the comments below.
Since we are talking about free spreadsheets, I will tell you about two I built and use. They aren’t necessarily for budgeting, but they help keep our finances organized.
- FLOP (Financial Life on One Page) - Basically my balance sheet to calculate my Net Worth, keeps track of account numbers, and other information about all my financial accounts.
- Bill Payment Schedule - I pay my bills twice a month. I use this sheet to make sure everything balances and gets paid at the right time.
If you are just getting started budgeting, I suggest reading this article first: How to make a budget. Once you are finished, come back to this article and you can download one of these sheets.
Household budgeting Spreadsheets
Here are all the personal budgeting templates listed in no particular order.
Personal budgeting spreadsheet
A good and simple budget spreadsheet. The user has to enter each purchase and details in order to get full and accurate tracking of expenses.
Household budget template
Allows you to put in each item you purchase and the item’s category. It will then add up and compare the total amount spent with the amount budgeted.
Personal Budget monthly spreadsheet
This one is good if you are trying to add up income and expenses and find the difference between the two.
Family Budget planner
This one allows you to look at the whole year’s expenses and income with each month being a column in the sheet.
Wedding Budget Template
This sheet provides suggestions on how much you should spend on each item in the wedding. It also will help you think of expenses you might not have thought of.
GLBL Budget Spreadsheet
Simple it is different than most because it works by pay period, rather than by month.
Debt Reduction spreadsheet
This is a really cool spreadsheet that helps you decide the best method for paying down your debts. It allows you to create a debt reduction schedule based on the debt-snowball method. The first page is a basic calculator for you to enter your information, choose your total monthly payment, and see a summary of the results based your debt reduction strategy. The second page is a printable payment schedule to help you keep track of your progress.
Personal Budget Worksheet
A famous old Microsoft budgeting template. It is very simple, but has proven to be helpful with the 2,000,000+ downloads. I like this one because all it does is provides a sheet to add up your expenses and your income showing the difference
Detailed personal budgeting Excel sheet
Very thorough, walks you through everything step-by-step, but just a little bit more that I am looking for. It is a really cool spreadsheet and will probably be very helpful to some people.
Thoughts about household budgeting
If you are just getting started budgeting I suggest reading two articles I wrote - How to make a budget and why budgeting is like baking cookies. From personal experience, I can assure you that you won’t get it right the first month. It’s okay, just keep making adjustments and it will get better and easier each month. Budgeting of some sort is critical if you want to master your finances or get out of debt.
If you are just starting, I wish you all the best and let us know about what you learn in the comments!
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This is a reprint of an article I wrote for Bible Money Matters.
The first thing you need to learn before making a better budget is how to make a budget in the first place. Once you have your budget started, these tips will help you keep it in tip-top shape!
Make a better budget!
1. Know your budget-busters and stay away!
If this is the mall don’t go, if it is QVC, turn it off, if is buying stuff online - throw your computer out the window! (Well, not really ).
2. Wait before purchasing.
Never buy large purchase items with out waiting a week to really be sure that it is the best use of your money.
3. Budget for Giving.
It makes it a whole heckuva lot more fun to give if you have the money sitting there waiting to be spent.
4. Make budgeting fun.
It is not a diet. Quit telling yourself that budgeting is just like a diet for you checkbook. In my opinion, the reasons that most budgets fail is because they are out of balance. Fun should be budgeted for. Going out to dinner, vacation, date night, etc.
5. Snowball it.
Once a debt is paid off, take that amount and either apply it to another debt (aka Debt Snowball) or to something fun (vacation fund, etc.)
6. Create a misc. budgeting category.
No matter how many categories you create, you can bet that you will have expenses come up that won’t fall into any of them. This is why it is a great idea to have a backup called miscellaneous.
7. Have fun money.
Have some money given to each family member that doesn’t need to be tracked and can be used for whatever he/she wants.
8. Combine budgeting categories.
Try combining categories to simplify the system. For example if you have money budgeted for car maintenance and car insurance, try putting them together in the same category.
9. Set money aside monthly for infrequent bills.
Just because a bill isn’t paid monthly doesn’t mean that it can’t be budgeted for monthly. If you pay car insurance every 6 months, just take that bill and divide by 6, viola! Now add that amount to your monthly budget, and when the next bill comes due, the money will be sitting there waiting!
10. Try budgeting with ING or another online bank.
This way you are earning interest on each one of your budgeting categories. Small amounts add up quick.
Feel free to share your budgeting tips below!
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This is a guest post from Resa Troyer. She is a 
blogger, entrepreneur, owner and COM (Chief Operating Mom) of Resa Design, LLC. It is a very chic and cool clothing line for babies and small children. Find out more at resadesign.com
In 2005 I started Resa Design, LLC. We are an independent clothing and accessory line geared toward modern children. These are some of the most valuable lessons I have learned.
1. Sit on your idea.
Do you think you have a great idea for starting your own business? Write it down. Write down all your thoughts surrounding your idea. Then put it under your mattress, or somewhere it won¹t get thrown away. Every time it comes back to your mind, pray about it. Try to think about how it would really work for you. If after a few months, or years, you just can¹t get your idea out of your head, and you’re still enthusiastic about it, then go for it. Not jumping into something based on initial excitement will help ensure the longevity of your business.
2. Cash is king.
I think many people don¹t follow through with their big idea because they don¹t know where the money will come from. I started very small, and had the luxury of being able to start with cash. Fifty here, a hundred there, it added up, but it wasn¹t a bit outlay all at once. And once I started making money, I reinvested it right back into the company. After about a year the business was supporting itself and by the middle of year two I had paid myself back. Although I realize that for some industries this is not possible, starting with cash helps limit your risk and keeps you away from those dangerous credit cards.
3. Keep it simple.
Your idea might have twenty parts. Start with one. Find a niche that your competition isn¹t serving. Learn from Starbucks and Sears and all those other companies that have hit hard times through the years because they were “all things to all people.” If you make and sell great coffee, stick to coffee. No one expects to walk into your shop and buy music and get bad coffee. They want your best coffee. Stick to that and let them go somewhere else for the music.
4. Do your homework.
Before you even put a dime into your big idea, do your research. How is your business/product different from what is already available? Is there a market for your idea? Is your product/service affordable? With the Internet available, this is an easy task. Spend a few days scouring the Internet for all the businesses you can (or can¹t) find that do anything similar to what you are setting out to do. For example, I am asked all the time if Resa Design would make baby slings. My answer is always no. The market is over saturated and I don¹t feel it¹s an area that would be worth the investment. On the other hand, we could not find a cool sibling tee anywhere, so we designed our own. They sell like hot cakes.
5. Start small.
Start where you can afford to (see #2). As a rule of thumb, buy only what you need for the moment. This will help your costs remain low, although it will take more of your time. As you grow you will have to make adjustments, and you¹ll have a better idea of your cash and supply flow. But while you’re starting out it will help you keep things manageable, explore the market a bit more, and experiment with the whole “running a business” thing. Maybe it’s really not for you after all. Better to learn that when you don¹t have too much invested in it, then later.
6. Ask for help.
Now, don¹t be a mooch, but find out what your friends and family can do to help you. Trade your service or product for theirs. Swap babysitting, pet sitting, or even pay for their services. Often times, those around you will be excited to be part of what you are doing. They may be glad to help, but never expect them to do it for free, even if they offer. You¹ll be glad you paid, even a little something, when you get their best work and in a fair amount of time.
7. Learn every area of your business.
I am a social worker by education. Business is not my forte and although I have developed more interest in it over the years, it¹s not really my favorite subject. I do get multiple business magazines, and read books as often as time allows. I try to soak up all the knowledge I can on everything that relates to my business in its current and future states. Even if you hire someone to do your taxes for example, you are still responsible for what is filed, so you need to know as much as you can about what your accountant does for you. Along your journey you may even discover some hidden talents or an area of business that really interests you.
8. Team up.
Make friends with other people in your industry. You might even consider meeting your competition. You can start by finding an online group or forum for people doing what you aspire to do or are already in your industry. Most of the designers I have met have been amazingly helpful. I can¹t begin to count the number of times another designer has helped me out. My husband calls them my virtual friends. We have never met, or spoken, but I have a team of designers just clicks away that are ready to share what they have learned, cheer with me, or even encourage me when things get tough. This was one of the most unexpected benefits I have received from Resa Design. I chat with some of them everyday.
9. Trust God.
The Lord causes my thoughts to become agreeable to His will, and so my plans are established and succeed. (Proverbs 16:3, AMP) I pray this verse over Resa Design all the time. I am confident that God has given me skills and talents, the idea to start Resa Design, and that He has a great plan for my success. Owning my own business is like having a child. It grows and changes everyday. I have to be flexible, yet wise as I mold it and direct it in the way it needs to go to be prosperous. Above all else, I trust God will lead and guide me in each step, purchase, decision, and interaction that I make.
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While I think few would argue that paying off debts is a good thing, there is a better way to accurately see the big picture of your finances. It is called your NET WORTH.
And no it is not just a number that rich people talk about at cocktail parties. It is what financially saavy people use to track their progress.
The simple definition of it is:
Assets(stuff you own) - Liabilities(debts) = Net Worth
It is simple to calculate and I will get to that shortly, but first…
Why Net Worth rather than just debt?
Your Net Worth is more encouraging
The primary reason for using your Net Worth as a gauge of your financial progress rather than the amount of debt you have is because it is more encouraging. When you look at your amount of debt to track progress you are only seeing the fruit of paying down those debts. On the other hand, your Net Worth increases for every good financial decision you make.
For example, you can increase your Net Worth with the following actions:
- Paying off credit cards or car loans
- Paying more towards your mortgage
- Buying property
- Funding a Roth IRA
- Getting your employer’s match on your 401(k)
- Building an emergency fund
- Buying index funds, mutual funds, or dividend paying stocks
- Or even just not spending as much money
There are many more things you can do to increase your Net Worth, but these are some of the bigger and more common ones.
Your Net Worth changes how you think about buying decisions
The second reason I prefer to use my Net Worth to track my progress is because I have found it helps change how I think about my buying decisions.
One of the most valuable financial lessons I have learned can be summed up in two words: buy assets. What I mean by that is you should spend more of your money on things that will keep cash in your pocket. So they should at the very least:
- maintain their value
- but better yet increase in value
- and the best would be increase in value and provide you income as well.
On the other hand you should avoid buying things that are going to take cash from your pocket. Coincidentally, these are most of the things most of us spend our money on. When you buy clothes, food, electronics, decorations, cars, entertainment, you are (generally) using cash to for something that is going down in value and therefore decreasing your Net Worth. Examples of this would be:
- Spending $200 on new clothes
- A $50 steak dinner
- Getting the new iPhone
- Going to the Yankees game
- A brand new BMW
Think about how much you could sell each of these for 2 years from now. Each one of them is a depreciating asset, so 2 years later they would not be worth what you paid for it, if anything at all. But if you had spent it on…
- Buying property
- Funding a Roth IRA
- Getting your employer’s match on your 401(k)
- Building an emergency fund
- Buying index funds, mutual funds, or dividend paying stocks
You would have a much better chance that it would be worth at least what you paid, and it would more than likely be worth more than you paid for it.
Obviously there is more to life than Net Worth, and you can never avoid spending money on depreciating assets, but you can avoid spending ALL of your money on depreciating assets. This is the key to why many people never get ahead financially. They spend all of their money on stuff that goes down in value. Once you start buying things that increase in value, you begin building a snowball that just grows larger and larger, faster and faster.
I don’t want to get the cart ahead of the horse, so lets get back to our Net Worth. The reason I mentioned this is because I want you to be thinking about the end result of each buying decision. None of the things listed above are necessarily wrong, but they should be thought about and decided upon rather than just reacting to what you “feel like doing”. Your Net Worth will reflect each buying decision that you make - good or bad.
How to calculate your Net Worth
This shouldn’t take more than a hour if you have never done it before. When you update it in the future it will take even less time than that. I have created a template from my own balance sheet that you can use if you would like. You can download it here.
1. Get a spreadsheet
First off, you can do this on paper if you really want to, but I suggest Excel, Google docs, Open Office, or really any kind of spreadsheet will do.
2. Total your assets
List every asset you can think of. Anything that you could realistically sell. For the purposes of sanity and simplicity I don’t bother with items under about $500. Yea, I am sure I could find someone on Ebay to buy my socks, but I am just looking for a general picture. So I just lump together all these smaller items as one line called “Misc items” and take a conservative guess of what they could be sold for.
So your house, cars, retirement accounts, stocks, savings accounts, checking accounts, emergency fund, jewelry, and anything else similar would fall in this category.
To get real estate values you can use Zillow to get a decent estimate of what your home may be worth. For automobiles you can check out Kelley Blue Book to see what they could be sold for. For all your checking, savings, investment accounts you can either check the balances online, or just use your last statement.
Once you have them all listed with the estimated selling/liquidation value you can total them up.
3. Total your liabilities
A few lines below the Assets total, we are going to now list every debt you have. Mortgages, credit cards, student loans, they all apply. Do the same as above checking balances on each one and then total your debts to get your liability total.
4. Subtract them
Now you can subtract your liability total from your asset total and viola! You have your Net Worth. Date it and save it.
Now what?
When I first calculated my Net Worth, it was -$13,843.84. Which was eye-opening to me. I knew I had a bunch of debt, but didn’t realize how below par I was. Regardless of what you number is, just look at it as the starting point. It is from this point that it will become larger.
After we had been working at it for one year it was up to $746! We were so excited to have a positive Net Worth! Even if it was only $746. As we kept on working on it, it has just continued to grow.
I normally update mine about two times a year. But if you are working really hard at it and need to see the encouragement of it increasing, do it more! As in just about anything, you are either moving forward, or you are going backwards. If you are increasing your assets by making good buying decisions or minimizing debts your net worth will be growing.
Next step is to quit spending! Getting out of Debt (Step 4)
Click to go to the beginning of the Getting out of debt series.
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Are you looking for help getting out of debt?
Great, I think you have come to the right place. At the time of this writing, I am right there with you on this journey to break free from the “slavery” that the Bible calls debt (Proverbs 22:7). It is not easy, but it also isn’t that difficult either. Over the last two years my wife and I have paid off nearly $30,000 in consumer debts from some mistakes that we made in the past.
The 7 steps that I am going to take you through are things that we did to pay down our debt or we would have done if we had the opportunity. Each article is fairly long, so you can feel free to bookmark it and come back later or use the print button towards the bottom of each article to print them out.
If you are serious about getting out of debt, I recommend that you read each article, even though the first two are a bit less practical than the last five. I believe that they the first two include the keys to successfully getting out of debt.
The 7 Steps to getting out of debt
- Getting out of Debt (Step 1) - Realize it is not about you
- Getting out of Debt (Step 2) - Open your mind
- Getting out of Debt (Step 3) - Create a balance sheet
- Getting out of Debt (Step 4) - Quit spending
- Getting out of Debt (Step 5) - Cut expenses
- Getting out of Debt (Step 6) - Make sacrifices
- Getting out of Debt (Step 7) - Snowball your debt
If you go through these articles and just do some of the stuff mentioned, you are going to be in much better financial shape than you were before. But, I recommend that you sit down with each article and really spend some time with it. The last five articles are going to require some actions on your part. So, spend a couple weeks and make getting out of debt your new hobby and work hard at it! You will be rewarded for your efforts!
Other resources to help you get out of debt
I have written quite a bit about debt on this site, since I have been trying to break my way out of it myself. These are a few other articles that might be worth reading…
- Why you should get out of debt
- The Bible and Debt
- Learn how to say NO to yourself!
- How to make a budget
- Christians and Debt
- 6 Tips for a debt free Christmas
- Money doesn’t solve money problems
- How to quit spending more than you make
and if you still need some more articles about getting out of debt you dig through these debt articles and these articles on debt-related topics…
Remember, while I think you should read as much as you can to become informed, it isn’t about how much you learn, but how much you apply. So read up, learn how to do it, and get after it!!
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This is a reprint of an article I wrote for Being Frugal a few days ago…
When I was about 14 years old, my uncle suddenly and unexpectedly went home to be with the Lord. He had meticulously taken care of the finances for their family and left my aunt on a very solid financial foundation. Obviously, this didn’t take away the pain of him being gone, but his preparation eliminated additional stress that would have been present without it.
It’s one of those things we all prefer not to think about, but it is always better to be prepared. My aunt is still reaping from what my uncle sowed by having his things in order.
My FLOP
Being impacted by my uncle’s premature death and wanting to do everything I can do to help my wife, I decided to create a system for keeping things organized.
It has been a work in progress over the last few years, but has evolved into a very helpful tool. Simply put, it is a single file or location for all your financial account details. I call it a FLOP (Financial Life on One Page). FLOP sounds a little cooler than FLOOP, but not much
In adding to it over the last few years it has come to have three main purposes. The first being that it is a:
1. Balance Sheet
One of the best pieces of advice I received about 5 years ago, when I started my journey to clean up my finances was to keep a balance sheet. I didn’t really understand why at the time, but I did it anyway. I have updated it twice a year since I started it and it has been a great source of encouragement as I have fought to get out of debt.
The reason it has been such a source of encouragement is because a balance sheet not only takes into account the debt you have been paying off, but all of your good financial decisions. So increasing your savings, paying down debt, making wise purchases all will affect your balance sheet in a positive way.
Also, looking at the size of your debts or assets does not necessarily give an accurate report of your financial condition. To get a accurate picture of your financial situation you need a balance sheet to calculate your net worth. It is very easy to do and is just a big subtraction problem:
Assets - Liabilities = Net Worth
If you have never started a balance sheet, I recommend doing it. It is a simple way to track your financial progress as you move towards your goals. For most people it shouldn’t take more than an hour to gather up all your account balances and asset values.
And as with most things, you are either moving forward, or you are going backwards. If you are increasing your assets or minimizing debts your net worth should be growing. If your net worth is getting smaller, then it is an indication that you should re-evaluate how you are spending your money. And even if your situation is not very encouraging, it will force you to see the financial truth so you can make adjustments as needed.
How to create a balance sheet
- Use Excel, Google docs, or some other spreadsheet software.
- List every Asset you can possibly think of from cars to stocks to jewelry for the amount that you could quickly sell it for. (To save time, you can lump together smaller assets like “misc. household items”) Total these items up to get a subtotal of your assets.
- Below the Assets total, list every debt or liability that you have. Mortgages, credit cards, student loans, they all apply. Total your debts to get your liability total.
- Subtract your liability total from your asset total to get your Net Worth.
2. Organize all my login information
Another piece of good advice I got a few years back was to create an extremely unique login ID and use it for every website that I had an ID for. I followed the advice and it has helped, but it is not a fail-proof system. Some sites require your email address, some want more than 8 characters, some want less, etc. And in this day in age, where you just about need to login to open your refrigerator, it can be difficult keeping track of all your login information.
After adding all your accounts in the balance sheet section above, you should have all your account information listed already and you can just add a column to add your login for that company. If you use various passwords you could list them in another column as well, but consider using a password hint rather than the actual password. I still come back to my FLOP at least once a week to figure out a login that I forgot about.
3. Financial roadmap for my wife
The third and most important reason for my FLOP is for my wife. In most families, one person manages the finances and has a better understanding of the overall financial picture. I am that person in my family. Are you that person in yours?
If so, would your spouse (or other beneficiaries) know where to find your financial information? Insurance policies, bank accounts, investment accounts, safe deposit boxes?
I know for my personal situation I know a bit more about our financial details than my wife does. I use my FLOP to layout all of the pertinent details for my wife, if she ever needed them. It contains the name, phone number or web address of each institution, our account numbers for those institutions and any other pertinent info that may be needed.
I then burned the file to a CD and kept it in our safe. Every year or so I put a copy of the updated FLOP in there.
Losing a loved one is a terribly difficult process. Having a “roadmap” prepared in advance for your loved ones is a great way to help eliminate unnecessary stress.
If you are interested, you can download a copy of my template for my FLOP.
This article was included in the Carnival of Personal Finance
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I signed up with ING about 4 years ago and have had a great experience with them. They have been a model business that has worked very hard to satisfy and meet the changing needs of their customers. These are just a few of the ways they have helped me.
1. They are nuts about safety.
A study from the University of California, Berkeley was just published that measured occurrences of identity theft at the top banks. Guess who came out the winner. Yep, ING was rated the safest bank from that study. It is really no surprise to me, just going through their login process you become well aware that it would be a tough feat to hack into someone’s account.
2. Consistently good interest rates.
You may occasionally be able to find a better interest rate online, but ING consistently has good rates. And the rates still clobber any brick-and-mortar bank.
3. Free Bill Pay.
Yes, you can get free bill pay from just about anywhere. But, I have used a few different bill-payment services and theirs has been the easiest and quickest to use.
4. No overdraft charges
This is an a brilliant service that they offer. Most banks charge you about $30-$40 overdraft fee if you bounce a check. With ING, you don’t have to worry about that. Rather than charging that overdraft fee, they basically lend you the money at a competitive interest rate until you bring the balance back to $0. So if you are short for a couple days, it might cost you pennies rather than $30-$40.
5. They send paper checks for you
If you need to send a paper check to someone, you just go to their site and fill the check out like you normally would. They will then mail it to whomever you would like. How easy is that?
6. CDs with no minimum.
Not only do they have very competitive rates on their CDs, but they also have no minimums. This makes it very convenient to do a CD ladder and open up multiple CDs with different maturities to take advantage of the rates available. Many banks only offer good rates to customers with $10,000 or more. Not ING.
7. They make budgeting easy.
ING has been my budgeting tool of choice for the last few years. I am not sure if they created it to be a great way to budget or if it was an accident, but either way it is great. You can read more about how I budget with ING if you want.
8. They now own Sharebuilder.
I opened a Sharebuilder account about 5 years ago and currently have most of my stocks with them. They only charge $4 to purchase stocks, which was the best deal going at the time (Now Zecco offers free trades). I was happy with Sharebuilder before, but now that ING bought them, they have made some nice improvements to it as well. Lowered some fees, simplified some processes, improved the user experience, etc.
9. Great customer service.
I have called them about 5 times over the last 4 years that I have banked there and I have not had a bad experience. They still do NOT outsource their calls, so every time I have been able to speak to someone who speaks my language 
- that is a good thing. I have never been on hold more than a couple minutes and most times I have gotten someone right away.
- that is a good thing. I have never been on hold more than a couple minutes and most times I have gotten someone right away.10. Bonuses for friends.
One of the things that ING has become famous for has been their referral program. New users get $25 if they are referred to open an account, while the referrer gets $10. Not a bad deal. So of course I will send you a referral if you are interested. Just let me know.
What did I miss? Are there other features or other banks that you love?
oh, and this post was featured in the carnival of money hacks…
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7 Things about money I learned over the 3 years that we have been married
1. Money issues need to be talked about
Many people try to avoid subjects (or really anything) they don’t like or are afraid of. You have to face the giants. If your finances are a mess, you have to face up to the truth. How can you expect to move a mountain that you refuse to admit exists?
2. Decide what you want to accomplish - together.
In order to succeed financially as a team, you have to have unity. You may not agree about everything, but find those areas that you are in agreement and shoot toward those goals. They will be a lot easier to attain if you are both putting focused energy towards them rather than pulling against each other for your own thing.
3. Realize that you balance each other out
This might not be the case for everyone, but for my wife and I, this was clearly one of the reasons God brought us together. We both bring different financial mindsets to the table and it keeps us in proper balance. If one is a spender and the other is a saver, I got news for you: it is probably by design. If my wife were just like me, we would be living an unbalanced life, probably saving too much for the future and focusing not enough on today. We both bring balance to each other’s life financially. In our case, we both had to make sacrifices to meet in the middle, but because of it we are living more in line with God’s best for us.
4. Support your spouse (yes, even if they have problems)
It is so critically important to cut each other some slack and allow your spouse an opportunity to grow. None of us are perfect and we all have areas to grow in. Part of the growing process involves making mistakes, so if your spouse isn’t being as financially disciplined as you are - cut him/her some slack. If you are constantly nagging your spouse about money (or anything for that matter) it doesn’t give them much incentive to change and it keeps them from being open with you about their failures. Being able to encourage each other when either one of you fails is very important.
5. A budget is necessary
Living on a budget is different for a single person than it is for a married couple. Let me say, I think everyone should use some sort of a budget, but especially married couples. The reason being is that a single person who doesn’t budget ultimately knows the responsibility for the bills, debt, consequences, etc. will fall on them. When a couple lives without a budget they both can be secretly thinking, “well I will let my spouse take care of it,” and things can fall through the cracks. Having a budget creates an unbiased system to hold both parties accountable for their actions.
6. Individual spending money is necessary
It is way too much of a hassle to have to discuss EVERY purchase you make. Each person needs a specific (and small) amount that they can spend however they choose - but just like allowance, no more when it is gone. It has worked well for us to make this cash solely for individual purchases - going out to eat, clothes, buying food for potluck at work, etc - misc things. You can look at how we manage our money, but basically 95% goes to our joint accounts to pay our bills, pay debt, common saving goals, etc. The remaining 5% gets divided between us for our individual interests.
7. Eliminate sources of strife
This was eye-opening to me. When we first got married, we paid for gas for our own car out of our individual spending money. It just seemed logical to me and seemed like it would work fine. We only had a limited amount of spending money for each of us and it would be enough to cover the gas for the week and other miscellaneous things we needed like I mentioned above.
The problem arose when in a very subtle way - we both seemed to be keeping a mental list of how often we drove places together in each other’s car. And of course, we both often thought that we were driving our car more than the other person. We really were not selfish in other areas of our marriage, but that one small thing was causing unnecessary strife. Now we pay for all of the gas out of a joint account - problem solved.
Have you learned any lessons about money and marriage that you could offer?
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Seth Godin, one of the premier marketing gurus of our time, recently wrote a post for “college grads or just about anyone.” I have read a few of Seth’s books, including a personal finance book he wrote, and have always had a lot of respect for him. He is a great marketer, but more importantly he really seems to be a honest guy trying to do the right thing. He has taken the long-term approach to doing things and it seems to have paid off for him.
Anyway, to his advice:
“Only borrow money to pay for things that increase in value.”
He goes on to say the three main things should be your business, your house, and your education. I love that he says this with the common thinking across our country that a car payment is something you can never escape. And that is just the beginning, then you get into loans on your living room furniture, and then - the worst - credit card debt.
I am excited to see that Seth is using his platform to get some valuable lessons out to his readers. It is one that people can never hear enough, hopefully they will heed his advice.
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