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My wife and I drove up to Lancaster, PA, for a wedding this past weekend. Since my parents watched our son, we had some peace and quiet for the first time in a while. Usually on road trips, I like to listen to a book on tape or a couple of podcasts. This time, I didn’t get around to downloading anything, which in hindsight was a huge blessing.
We ended up having a lot of fun conversations. It felt like we were back in our early dating days all over again. So needless to say, it was a fun wedding and an even better six-hour car ride.
Recently, we were asked to participate in a panel discussion in a marriage conference at our church. The topics involved will range from parenting to finances to everything in between. The theme is “Great Expectations”.
I have to admit that I can’t wait. Anytime that I can talk about finances, I am thrilled. So naturally, I immediately responded, “Yes, count us in.” My wife, on the other hand, was a bit apprehensive, as she was unsure of what she could add.
Editor’s Note/Mrs. MSM: While I love encouraging and supporting Rob’s passion for personal finance, I am definitely not as passionate about it. One day, if I’m invited to speak on a fashion panel, I’ll gladly have him pay back the favor by joining me and speaking on the latest fashion trends.
Mr. MSM: I did a project on Fast Fashion in Grad school. Bring it on!!!
My wife’s apprehension subsided once she read through the panel questions and knew that she could speak to the topics. The questions are:
- Do you make and stick to a budget?
- What is your stance on debt?
- Are you planning for your financial future?
Based on the above questions, the audience would be polled and respond to the questions with an A, B, C format.
E.g. For the first one, the response choices would be:
Anyway, based on the audience’s answers, we would then address the question and tie into the theme of the conference, “Great Expectations”.
On our long car ride, my wife and I started to brainstorm how we would answer the questions. I thought I’d share our responses with our readers and receive feedback from everyone ahead of the conference this weekend.
Do you make and stick to a budget?
My wife and I believe using a budget is extremely important. We definitely would not be in the position that we are in today without really knowing our spending habits.
When we were first married, a budget was a foreign concept for Mrs. MSM. As a result, she had trepidation when I brought it up early in our marriage. At face value, it seemed constricting and controlling.
Let me turn it over to Mrs. MSM, so you get her point of view on this.
Mrs. MSM: I had never really been exposed to the concept of a budget. My mother handled all the finances in my household. As far as I know, she never used a budget. All that I knew was that we had enough money to do all the fun things that I wanted to do growing up without really thinking about the money involved.
So when Rob brought up a budget and living within our means, I thought, “What did I get myself into?” I had never worried about spending before, and now all of a sudden every purchase would be monitored and categorized every month.
Once I gave it a chance, I realized how beneficial budgeting really was. Over time, I came to understand the wisdom behind it and the peace of mind that came with it.
After I became more comfortable, I was able to help my Father figure out his financial situation as he had been overwhelmed with it since my Mother had passed away.
It took some months to organize my Father’s finances. But soon enough, he was all set up on Personal Capital, and everything has been smooth sailing since. I don’t know how I would have done it without Rob’s help and guidance though.
Mr. MSM: Mrs. MSM is definitely selling herself short. She did the majority of the work. I built the roadmap in the beginning to get the ball rolling in some areas. E.g. I dug through some paperwork to understand expenses and different accounts, but after that, Mrs. MSM took care of everything from there.
One of the things that we uncovered was that my father-in-law was not receiving the value from his financial advisor that he should have been. We quickly helped him make some changes, which included removing him from that advising firm and into low-cost passive index funds.
On top of that, I noticed that my father-in-law had accumulated quite a bit of cash in his bank account that was doing nothing for him, based on the extremely low interest rates at the time. We discussed different options for the excess cash, and he decided to extinguish his rather large mortgage with those funds.
Within four years, my father-in-law’s net worth has doubled as we increased his investment contributions, paid off his mortgage, and watched his passive index funds soar. This would not have happened if my wife and I hadn’t equipped him with budgeting tools.
What is your stance on debt?
We hate debt.
My parents instilled in me from an early age to have a disdain for debt. It’s been something that I have tried to avoid all of my life. I know there are people that use debt to leverage housing and make debt work for them. I commend those people because it is definitely not something that I feel comfortable with.
My mortgage would keep me up at night, as I constantly thought of ways that I could pay it down. I obsessed over tinkering with my loan amortization spreadsheet to see what would happen if I received a raise or if I paid a bonus towards the mortgage.
Since we paid off all of our mortgage, it has transformed our lives. My wife would not be able to stay at home with our son and take care of her autistic sister if we still had a mortgage. Most likely, we would need her additional paycheck contribution if our mortgage still existed.
So for us, we experience a heightened level of financial freedom by not having any debt.
Are you planning for your financial future?
As most of you know, we are eagerly trying to reach FIRE and retire within the next five years. While I have always been a good saver, it wasn’t until I paid off my mortgage that I started maxing out my 401k contributions. At that point, I really began to see our investments sky rocket. Within the past two years, our liquid assets have doubled in size. I know because I use Personal Capital, which is by far the best tool out there in regards to financial analytics and planning tools. Their investment section is INCREDIBLE. If you haven’t signed up for Personal Capital, I definitely encourage you to read my review and sign up today. Best of all, it’s completely free.
The stat is around 40% of couples maintain separate accounts. One of the common things that I have heard from married couples that have separate accounts is that they are typically not on the same page when it comes to investing for the future or even retirement planning.
Most of the time, both individuals believe that they will be fine in terms of reaching retirement. But what if the timing is many years apart? I oftentimes wonder if one spouse might resent the other for not being able to retire around the same time. Imagine one spouse who has saved up enough to travel and pursue some of their passions while the other is still slogging away at work trying to catch up to the other. It would be hard to avoid bitterness in that situation.
I had one woman confess that she feels like the burden was completely on her to fund both her and her husband’s retirements since her husband recklessly spends. She knows at the current rate that he will never be able to retire on his own. Since she does not want to divorce him, she believes the most feasible option is to cover both retirement accounts. I offered to meet with him, but he declined the offer. I hate to leave this post on a low note, but I do want to emphasis how important it is for couples to really be on the same page, preferably before marriage, but even after marriage, it is possible to change habits and align goals.