Family Finance Series Part 2

Family Finance Series

Part 2

Last week we laid the groundwork on the financial landscape of America, including financial struggles in the marriage and ways of developing the motivation needed to take the first step towards changing your habits.  Today we will discuss why we fight about money and teach you how to change your mindset when it comes to making financial decisions.

Why Do We Fight About Money?

So let’s lay it right out there. Why do we fight about money? There are two major reasons. The first is lack of honest communication. How often have you been dishonest or deceitful with your wife about the way you spend money? For example: hiding lunches out, trips to the mall, online purchases, or grossly understating the cost of an item, etc. 

The second reason we fight about money? False expectations on how the money will be used, not following a clear and concise plan, and not holding each other accountable.  How many times have you set some money aside for one thing but then had to use it for another because you forgot about an upcoming expense? We’re all guilty of each of these to some degree.   

Good Men Great Dads- Family Finance Series Part 2

Good Men Great Dads- Family Finance Series Part 2

My wife and I used to just go with the flow, spending money at will until it was gone. Then we would talk about “where did the money go?”, like it was some big surprise that our car payments were due on the 15thof the month or that the electric bill was to be withdrawn on the 20th. 

I was not fulfilling my role as a leader in the home. We had no plan and we were living well beyond our means.  Our expectations were that if there was money in the account, it could be spent or we would just spend less the next month and pay off the difference on our credit card (which of course, never happened). Following this norm, we got ourselves in to financial trouble on more than one occasion early in our marriage. Once we started thinking of money as a tool rather than a commodity, we really started making some headway.

Generally, women have more foresight and are the savers and men tend to think more short term and are the spenders in a relationship.  (I should state that, obviously, this is not always the case.) It’s in our nature. Men see a need (which most of the time is actually a want), and seek to remedy that need as soon as possible.  Your wife, on the other hand, has a primal need to feel secure and financial security is a significant part of that.  I used to think: “I make this money, I should be entitled to spend it as I see fit!”   But now I realize that not using that money to serve my family was a problem.  I had a fixed mindset.  I never thought about how that car payment today could be a college education for my kids in the future.

Cycle of Dysfunction

Beyond the obvious issues, living outside of our means creates the cycle I highlighted in the last post: overextend yourself-> get stressed out -> fight about money -> both parties get resentful and spend more money-> further overextending and completing the cycle. Remember, the goal of a marriage is to enrich each other and you simply can’t do that when you’re always fighting about money. You’re in this together! You should be holding each other accountable, not hostage.  Dream, set goals, make sacrifices, create memories, and achieve those goals together. The key to successful communication about money is to be honest and open. The whole idea is to better your financial position and work your series of goals toward your eventual dreams.

Think of this as you would any other skill.  It is going to take practice.  At first you’ll be uncomfortable and uneasy. You’ll be unsure of yourself.  First and foremost, assume your partner has the best intentions. Don’t go in to a financial discussion looking to place blame or pick a fight, because that’s exactly what you’ll get.  That’s not to say the discussions won’t get heated, but just keep in mind, this whole exercise is for the good of the family. During your initial discussions focus on your spending, not hers.  Talk about what you’re willing to sacrifice to show her this is important to you and you’re serious about making it work.

Putting It to Work

You’ve already taken the first step in becoming successful with money. Just the act of reading this blog should tell you that you’re open to new ideas and maybe there’s a better way.  The first idea to start your financial journey to success should be this: “No debt is good debt”. I know that goes against everything you’ve ever been taught about money and it may seem like a lofty goal. If you don’t set big goals for yourself and your family, you’ll never realize what you’re capable of accomplishing.  While most of us will continue to pay a mortgage for years to come, the ultimate goal should be to have zero debt and a sizeable “just in case” fund. In the words of Dave Ramsey, “Your income is your biggest wealth building tool.” Instead of sending your hard earned money to the bill collectors every month, you can use that income to invest and build wealth. The simple act of becoming more engaged and intentional with your money will change yours and your children’s futures.

Your income is your biggest wealth building tool.
— Dave Ramsey

I didn’t think it was possible to be successful with money.  My whole life I always had the mindset that I wasn’t good with money, and it became a self-fulfilling prophecy. Once I exposed myself to the ideas, it became my reality. Reading and learning turns in to thoughts, which turn in to actions which turns in to habit. No matter what your financial history says, you CAN be successful with money. The key is to live intentionally and think long term.  And in doing so, you can arm your children with the tools they need to make sound financial decisions as well.  Creating habits and sticking to the plan are the keys to realizing your goals. Using your money to serve your family will strengthen your relationships and lay the ground work to change future generations’ views on money. 

In the next installment we will break down how to create a household budget and stick to it, identify spending habits and recognize areas for improvement, and how to monitor you progress. We will also cover how to speak to your wife about finances and how to set healthy boundaries and expectations for your kids in relation to money.