Financial Advice to Married Couples

o Work TOGETHER on your finances!
o Discuss all major purchases BEFORE making the purchase.
o Share ALL FINANCIAL INFORMATION with each other.
o No financial secrets.
o If you work TOGETHER, it will make you stronger.
o Avoid the trap of debt
o Some couples shell out thousands just for their marriage!
§ It is nice to have a great wedding, but to go into debt to do it?
§ Is it worth it?
o After many couples get married, they attempt to get everything that their parents have:
§ House
§ Furniture
§ Cars
§ Boat
o As a result, the first thing they have done as a couple was to strap themselves down under a weight of payments.

o Develop a plan for your future. Make your financial plan support your future plan!

o I recommend that a newlywed couple WAIT at least one year before making any large purchases (> $1000).

o SAVE money for emergencies.
o When you have no savings, every little thing that happens wrong to you (car problem, appliance problem, medical bill) becomes a financial emergency.
o Financial emergencies lead to STRESS.
o With 3 – 6 months of savings JUST SITTING THERE, these “financial emergencies” will not exist and therefore the stress will also not exist.

o SAVE money for the future!
Ask the following questions:
o “Is the fact that you are going to retire someday unknown?”
o “Is the fact that your children are going to college someday unknown?”
o “Is the fact that your children are going to get married someday unknown?”
o “Is the fact that you are going to purchase a house someday unknown?”
o “Is the fact that you want to go on a nice vacation to Hawaii someday unknown?”
o “Is the fact that you want to buy a nice boat someday unknown?”
o “Is the fact that you want to own a nice car someday unknown?”
o “Is the fact that you want nice furniture someday unknown?”
o NONE of these questions are unknown, yet many of us NEVER EVEN BOTHER TO PLAN FOR THEM!!!! The result of NOT PLANNING? They either go ahead with these goals and incur a TON OF DEBT OR they are unable to realize their dreams and instead live a lifetime of “woulda, coulda, shoulda” regret.

o Pay cash for purchases.
o Saving money takes time.
o Time allows you to truly understand if you really want that item
o It also allows you time to learn what a good deal is for that item

o Hold each other accountable.
o When one of you gets the “I want this!!!”-itis, the other can calm you down!
o You are stronger TOGETHER.
o Remember: ISOLATION = DESTRUCTION

o HAVE FUN WITH THIS!!!
o Managing your money can be fun. Done correctly,
o It allows you to support VERY WORTHY causes that you strongly believe in!
o It allows you to save more than you ever thought possible.
o It allows you to spend more than you ever thought possible.
o It allows you to give more than you ever thought possible.

Do you have plans for your life?

Do you have things you want to accomplish during your lifetime?

What are you doing about them?

Are they written down?

Have you written out a step-by-step plan on how to achieve these goals?

How much will it cost you to accomplish these goals?

I have found that when individuals are able to establish a direct link between their finances and their lifetime goals, they become rabid animals in pursuit of financial freedom!

Why is this? It is because they have a CLEAR REASON for why they are pursuing debt freedom! This is powerfully motivating!

If I pay off our debt, my wife can do what she has always wanted to do - stay at home with the children!

If I pay off our debt, I can quit the job that I am not passionate about and pursue the career that I am PASSIONATE about even though it generates less income!

If we invest money every single month, we will be able to retire by the age of 50 and start that children’s mountain camp that we have always dreamed of!

If we have no debt, we will be able to go on a paid-for vacation every year.

If we invest money every single month, we will be able to leave an inheritance for my children.

If we invest money every single month, we will be able to give $100,000 to our local church.

When you have a CLEAR REASON that is WRITTEN down, POWERFUL things happen!

I was sitting in a open-house/dedication ceremony for a new school recently. This new school replaced a school that had been built in 1929. It looked just like a WWII bunker.

The speaker said, “A round of applause for so-and-so for the architectural design.”
CLAP! CLAP! CLAP!

“A round of applause for so-and-so who led the construction effort.”
CLAP! CLAP! CLAP!

“A round of applause for the staff of the school.”
CLAP! CLAP! CLAP!

“A round of applause for so-and-so who arranged the financing.”
CLAP! CLAP! CL …

WHAT?!!!!

Now the last school was built 76 years ago!!!! And we had to FINANCE the new school?!! We were using TAX PAYER money to pay interest on a note for a new school when the last school was built 76 years ago!!!

This should not be! At what point in time did we figure out that we might have to replace the school someday?

Do you know that if the school had invested $3.69 per week into an investment, there would have been enough TO PAY CASH for the new building?

Instead, the school and the taxpayers are burdened with the debt.

It’s time to start saving for the replacement of this school!

Are you satisfied with the way you have managed your personal finances?

If the management of your personal finances was placed on trial before a jury of Your Parents, Jesus, and Your Spouse, would you be found “Guilty - of wanton mismanagement” or would you be found “Outstanding - teach your children and others about how you have done this”?

Now, if someone seven years ago would have asked me the question “Would you want your children to manage money the way you do?”, I would not have known how to respond. The reason? I did not have children at the time.

Now that I am a father, it MATTERS A LOT to me! I mean, look at the other alternatives for her to learn money management from!

• Congress? Give me a break!!!
• The President? Give me a break!!!
• Credit card companies? Wow!
• Banks? Here’s a clue - Banks are FOR-PROFIT organizations!
• Schools? They don’t even teach how to balance a checkbook anymore!

I do not know about you, but I want to be a GREAT EXAMPLE for my daughter to follow. In every way! Not just in personal finances, but in every way! I am passionate about this!

It was EMBARRASSING when I truly took the time to look at our financial situation in 2002 and analyze how I was really managing our money.

I was not:

• working with Jenn to develop a budget TOGETHER
• asking for her advice on many of the purchases I made
• stopping the spending when the money ran out
• telling myself “NO!” to my childish “I want this!” wants

Today, I am willing to sit on trial before a jury of My Parents, Jesus, and My Spouse because THIS MATTERS TO ME!

“My how the time flies!”

“Was it really 4 years ago that we last talked?”

“Our 20 year high school class reunion is THIS YEAR?!?!!”

Time has remained constant, but as we grow up we get so busy that it really does appear that time flies by!

It was almost 7 years ago that my daughter was born. WOW! I can not hardly believe it. In just 11 years, she will be off to college. UNBELIEVABLE!

Wait a minute … Off to college … Have I started saving for that?

The answer for us is YES!

Here is what we have done to save for her college. We started up a 529 College Savings Plan. It was VERY EASY. I went to our local bank and asked to open a 529 College Savings Plan.

Facts about the 529 College Savings Plan I am involved in:

• They required a mere $50 minimum amount to open the account.
• Additional future contributions were required to be at least $25.
• They ZAP my bank account once a month with an amount I have told them to deduct.
• The money is invested in mutual funds that I have selected.
• The money is put in AFTER-TAX, but I am able to withdraw the money (principal PLUS interest) TAX-FREE for my daughters qualified educational expenses.
• I am ONLY allowed to contribute $298,770 to this account at this time (I suspect that this will pay for college )
• Qualified expenses included tuition, fees, books, supplies, equipment, room and board.
• If I withdraw the money for non-qualified expenses, the interest earned is subject to income taxes PLUS a 10% penalty.

Do you know how easy it is to contribute a monthly amount to savings when you do not have to do anything? No writing checks. No on-line bill payment. Nothing. It is removed from my checking account automatically, and it is deposited into the 529 account automatically. It is then automatically used to purchase additional units of the mutual funds I have selected.

How sweet is that? Here is an example of what has happened to my 529 plan since it was started in 2003.

I have recently read a book that has rocked my world. The book is titled, “The Soul Of Money”, and it was written by Lynne Twist.

Lynne asks a tremendous question. Do you have enough?

Thought 1: There is NOT enough money for everyone
There are many people who believe that there is simply not enough money for everyone, so they hoard all of the money they possibly can.

“At least I have some for my family”, they justify to themselves.

Thought 2: There is enough money for everyone
These people have an entirely different mindset. While they may even have tremendous wealth, they are not caught up in the “keep up with the Jones’” trap. They give HUGE amounts of money away to causes that they strongly believe in.

“I have enough for today” is their thought.

Do you know people caught in the trap of Thought 1? There is never enough. They have 3 cars, but they really NEED this other car. They have 2 houses, but they really NEED this one more. They have a closet FULL of clothes, but they really NEED some more.

This does not apply to just extremely wealthy individuals! There are people caught in the same trap who are in PILES of debt. They are supporting their lifestyle with credit. I have seen that come crashing down approximately 100% of the time!

WHY?!!!! WHY does someone allow themselves to get caught in this trap? What exactly is enough? Will they ever get to enough?

The answer becomes real clear to me. I have enough for today. I am able to give more than I thought possible. I am able to save more than I thought possible. I am able to spend more than I thought possible.

I have enough.

Thanks, Lynne Twist, for writing a book that made me ask myself the question.

Do you understand everything you have purchased over the years?

Your VCR? How to set the time on it??!

What about all of the functions on your cell phone? I only know one person on this planet who knows everything about his cell phone. He is a certified cell phone junkie.

What about your computer? Can you use it well?

What about your car? I discovered just four months ago that there is an extra cup holder in our car. The problem? I have owned this car for nearly 10 years!

All of these purchases cost money. They cost YOU money. Yet, I would be willing to guess that many of us who have purchased these items do not understand FULLY how it works or all of the features it offers.

Why? Why do we refuse to take the time to understand how these products work? One reason is that we care only about a few features and the rest really do not matter to us. That’s OK. However, you will never be able to fully utilize that product until you fully understand what it has available.

What are some personal finance items you have purchased that you do not understand?

Insurance?
Mutual Funds?
Company Stocks?
Repo?
Government Savings Bonds?

New Rule: When it comes to YOUR MONEY, never purchase anything you do not understand fully! While the learning process about the product can be boring, tiresome, awful, terrible, or horrible, you will prevent being “taken” on a rip-off financial product. The cost can be huge if you do not fully understand the product you have purchased.

Example: For a 35 year old, Whole Life Insurance for $100,000 can cost you around $100/month. You can get the same amount of coverage in Term Life Insurance for about $10/month! That is $90/month cheaper! That is $1,080/year cheaper!

I have learned this lesson the hard way. Think about the personal finance products you currently have. Do you understand each one of them?