It’s Valentine’s Day! My wife and I have reached our 15th year of marriage, which is our Ruby Red Anniversary. Time for some reflection. When you have been married this long there is a lot to reflect on, however, I will keep it mostly focused on finances. Love and relationships are always tied together, even if it seems invisible sometimes.
A little background. Kris and I married in 2006 in Helsinki, Finland. I was a young, more handsome, version of myself. I was 25 and she was 22. We now have two children, 14 and 10 years of age.
We both didn’t grow up with a lot of money. That is both a good thing and a bad thing. When you are successful and get a little money flowing in, you tend to think that being middle-class is working a job and paying bills. Please read “Living a Middle-Class Life is Stressful” if you still feel this way.
Financial Independence 101: A Story
Starting from zero to becoming financially independent has been a learning experience, which is the tamest way I can say that. “Stressful as hell” is probably more appropriate. When you keep making more and more money, but your expenses keep growing, it can be frustrating. There wasn’t much information to get started. There is either budgeting information or investing information.
That is the main reason I created the Military Family Investing channel. I want to present simple information to my middle-class people. It takes a while to make the conversion from a standard middle-class mindset to an advanced rich mindset. But it can happen for anyone. But I will stop rambling and get into the 10 things we have learned over the years.
1) Budget like crazy. We had a loose budget for many years. Meaning that I would set aside, say $1000, for bills. I just made sure that my bills didn’t cross over that amount. Nope, this is not the answer. Budget down to the penny. Many, if not all, of your bills, are increasing and adding in fees. You need to know about these changes.
I paid Netflix two separate bills for over two years when they split their DVD and streaming services. Then when I quit the DVD program, I owed them $30 for a missing DVD. This happens all the time. If you don’t have a spreadsheet that you are tracking religiously, there is a problem.
2) Have fun. This is the most important thing that I can express to young (and old) couples. Budgeting, reaching financial goals, and saving for the future is great, but you actually want to have a future to get to. If you focus solely on money, you will lose the marriage.
So You Think That You are Middle Class?…. haha
The caveat is to focus on experiences. Building or creating experiences is more important than spending a ton of money. Consider it a challenge. If you have $300 for a family or couples weekend, see how far it can go. Use hotel credits, coupons, free tours, etc… to facilitate amazing experiences.
3) Buy a small house first. We bought a huge, over-priced house as our first venture into real estate. Big mistake. Even though we still own the house (2008), it was a pain to keep. We have amazing experiences in that home and it holds sentimental value to our marriage. However, if we would have bought a smaller house (3 bed, 2 bath, 1300 sq ft) we would have had the same intangible memories, but with bigger tangible bank accounts.
We we are on this topic, control the spending on cars. Used cars are the way to go. Upgrading cars every two to three years can leave you in a pile of debt. Read Taxes 102 to learn how to buy nice cars, intelligently.
The Magic of the Infinite Return
4) Second-hand is your friend. My wife was always good at buying second hand. That is the good thing about having kids early. No one expects you to spend tons of money on your kids. I see a lot of older couples having kids and paying a ton of money for kids’ clothes, strollers, rockers, and toys. Kids don’t require much.
A secret to having kids- they want to play with whatever you are playing with. They will only play with these fancy toys when you are playing with them. They would rather play with your phone (lol).
5) Set goals. This is the main thing that we were lacking until recently. Setting goals together will ensure everyone is on the same page, including kids. We always were good at budgeting. But we never took it a step further to set financial goals. For instance, build a goal to save and invest $10,000 in 2021. Now you can better map out your year. There will be no animosity or resentment about investing. You are also in a better position to afford furniture, trips, or other items you want after you achieve your annual goal.
6) Remember the invisible budget. One thing that most people forget is to plan for the invisible budget. This causes credit card debt, frustration, and other issues. The invisible budget involves small incidentals that crop up during the month.
Let’s say we are doing a very tight budget. We are making $5,000 and have $3,000 of expenses. We shouldn’t try to invest $2,000 a month. I would aim more like $1,000 a month. I can guarantee that all kinds of little things pop up. This can be girl scout cookies, school supplies (mandatory), going away gifts for co-workers, parties, birthday gifts, small maintenance issues, registration, fun, pizza, etc… The list is too long.
Keep the Job, Quit the Mindset
Give yourself room for “life”. I know how important it is to track every penny, but by staying on top of your budget and setting a minimum amount to invest per month, you will be covered. If you have some leftover, you can decide what to do with it.
7) Start reading. I was an anti-reading human before a year ago. I got out of high school and didn’t want to play the education game anymore. I still don’t want to do the whole formal education thing, but self-education is the most important routine that separates the rich from the poor. Read about love and finances.
Marriage is difficult, but in my opinion, is the most rewarding institution that you can submit to. It is higher than one human being. It is a foundation of love and trust. Education plays an important part in marriage because all parties are growing. Kids are growing and adults are growing. We start to realize that our bright shiny careers are just jobs in disguise.
How the Rich Buy Their Bling
8) Create more income. As soon we left the home at 18 years old, we should have been creating multiple streams of income. Having a diversified stream of income will not only make us more effective communicators, planners, and leaders, but it will reduce the overall stress of married life.
My wife traveled to multiple different duty stations because of my military career. If we would have started building her an online presence in 2008, she wouldn’t have had so much stress during these relocations. She could have set herself up as a Russian tutor or translator. Over the years we could have refined her business and made her a great income.
But I was ignorant. All I knew was earned income. Work for “the man.” I didn’t have the financial education to put her on the right track. The good part is that I now have that education and it can be passed down to our children.
9) Love every day. Marriage can be tough, but loving someone is not. We always have a layer of stress on top of our love lives. That is just from being a human being in a society where having money is required.
To get past this stress, we need to stay organized and consistent. And, we have to make a concerted effort to love. It is not natural to show love every day. We wake up with the mindset to take care of kids, go to work, and complete our tasks at home. But, loving is the life force of our marriage and the love we pass down to our children. Creating experiences is a good way to reset emotions and bring in love.
The Pitfalls of Owning a Home, and How to Prevent Them
10) Envision your future together. We are working our butts off to become financially independent. For us, it is not about the money, it is about the opportunity to become worry-free. We can envision ourselves on the white sand beaches of Flordia, sipping on some nice drinks, watching our grandkids playing in the clear waters.
As the money guy, I do not want to be on vacation. I do not want to have a boss calling me about some stupid presentation. I want to be completely free. That is the goal. I want dividends, rental income, royalties, and our pension all being deposited in our accounts while we are on the beach.
The only way to get there is to 11) Stay together 12) Become Educated 13) Set goals 14) Stay on task 15) and Stay on target. By working together, we have actually become closer than ever. This plan of ours is greater than both me and my wife and is greater than our marriage. It involves our kids and grandkids. It is the biggest challenge we have ever faced and we are ready for it. It is something that love, education, teamwork, and work ethic can overcome. And we are excited to do it over the course of our lifetimes together.
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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