In part 2 of a 3 part series, I share how we transformed our money beliefs to help us reach financial independence before 40.
There’s nothing to be scared of. Grab a notebook and your favorite beverage (beer for me). Learn how you can overcome your fears and challenge stories in your head to reach your financial goals.
Heal Your Money Story.
Before you can achieve financial goals as a team, you need to understand your money story.
Every money story is different. Every money story is complex with multiple influences: family, friends, popular culture, emotions tied to money, etc.
If you don’t know where to start, you can ask yourself some or all of the following questions to unearth insights about your past and present:
- Childhood and Early Adulthood
- How was money discussed in your house? How did that make you feel?
- What emotions and behaviors arose when people talked about money in your house? How did that make you feel?
- Did you have everything you needed to feel safe and comfortable growing up?
- Did you get everything you ever wanted growing up?
- What money lessons did you learn growing up? Implicitly or explicitly.
- Current State
- Do you ever feel guilty after making a purchase?
- Do you know the state of all of your accounts or do you avoid looking?
- When you think about your monthly bills, how do you feel?
- When your friends want to go to an expensive dinner or go on an expensive vacation, how do you feel and behave?
- When you think about the state of your finances, how do you feel? Are you where you want to be financially? If not, why?
Take some time to think or write about your experiences and feelings. You might unearth some unpleasant feelings, it’s normal. Don’t judge yourself. You’re here doing the work and so long as you persist you will improve.
Once you understand your money story you can start telling yourself a different story and back it up with the tools and strategies to reach your goals.
My Money Story.
I’m the youngest of three children born in the mid 1980’s. My parents divorced when I was five years old. My father owned a farm and my mother was a stay at home mom. The divorce was rocky: custody battles and my mom had to rebuild a career from nothing, making money inconsistent at times.
My father is good with his money. He gave us kids good advice about not spending more than we earned and always paying off our credit cards.
My mother had champagne taste on beer salary. She loved us dearly and wanted to make us happy but that often resulted in promises unfulfilled.
- INSIGHT: This created a sense of LACK and DISTRUST/DISBELIEF in me. The result is two fold:
- Lack – I never feel like I have enough money. So when I do spend money, I feel guilty. That guilt led to me hiding my increasing credit card balance from Mr. Scribbles at the beginning of our relationship.
- Disbelief – I don’t believe something is going to happen until it is happening. I don’t let myself get too excited. I always plan for the worst case scenario. The result is that I’m not as happy or stress-free as I could be if I just chilled out. Instead, I overthink and catastrophize. Fun.
After my mother died in 2015, us kids went through her things. She had a storage container filled with stuff and the credit card debt to show for it. She chose to spend her time and money buying stuff instead of fixing relationships.
She’s not the villain. She had her own money story and she was doing the best that she knew how. She was a great mom and I love her dearly. I’m writing this because I learned a valuable lesson. When we die, what matters are the people you loved and who loved you in return. How you existed, how you treated others, and that you lived the life of your dreams. Not how many toys you had.
Once I identified the emotions and how they drove my decisions, I felt free.
Mr. Scribbles was very supportive throughout this process. Sharing our money stories brought us closer. This is why we don’t argue about money. We know each other’s triggers and goals, so we respect them. Example, I don’t spend money on myself. So, if Mr. Scribbles sees me looking at something at a store for a long period of time, he’ll come ask me if I like it, and then go buy it for me or tell me to get it. <3
HELPFUL TIP: When Mr. Scribbles and I are talking about money (or really anything) and I start to feel my emotions spike, like I’m getting defensive or feeling shame, I say something like,
“I need to stop for a second. The story I’m telling myself right now is that I’m not doing enough… OR …we don’t have enough to do X… etc.”
Taking a moment to checkin with the old stories in my head allows me/us to shut them down before they drive decision-making.
Once you understand each other’s money stories, your goals can be supported by the tools and strategies necessary to stay the course. Or know when the winds have shifted and you need to change course.
Create Shared Goals.
This is the fun part! Dream big with your partner.
What do you want your life to feel like every day, week, month, year?
Do you long to have children? Start a business? Travel the world? Change careers or get a degree?
Every goal has a financial implication that you can plan for. But you have to get on the same page about the goals and the timing of those goals.
Some goals you’ll want to achieve earlier in your life for health reasons. Speaking from experience, having a baby at 30 was easier than at 36. I imagine that climbing Mt. Everest is easier at 35 than 65. Some goals you might want to hold off on. Again, speaking from experience, traveling with school aged kids is easier than toddlers. I said it, fight me.
But your goals don’t have to be as lofty as travel and children. Maybe your goal is to afford one vacation per year, a monthly housecleaner, or pay off all your consumer debt.
I think it’s helpful to have a mix of achievable short-term goals and aspirational long-term goals.
Here are some of the goals that we’ve had over the years:
- Buy a home in the PNW
- Pay off consumer debt (student loans, car loans, credit cards paid off every month)
- Visit my family in California every year
- Take one vacation every year
- Bi-weekly housecleaning
- Have kids
- Reach financial independence by 45
- Move to a foreign country
- Buy a rental property
- Be healthy enough to play with our kids
- Install an organizational system in our garage
- Get a fire pit and lounge furniture for the backyard
Decide How to Decide.
But how do you decide which goals to pursue and what path to take to achieve those goals?
Knowing how to decide is a valuable tool for a couple. If you operate from the same decision-making playbook, you can avoid lots of disruption. BUT, while being on the same page is lovely, you still need to know how to constructively disagree and be open to changing your mind if your partner has a better idea. Growth mindset is good, friends.
Here’s how we tend to decide:
- What will make us the most money / save us the most money
- What will give us the most options
- What will make us the happiest
- Honorable mention goes to: What will make our lives easier
Simple. Right?
In most situations, we can apply the above decision-making criteria. We used this method to decide whether or not to sell our home in the PNW before moving to Portugal (here).
In order to set your decision-making criteria, you need to understand what you and your partner value most. You might care more about security than options. You might care more about simplifying your life, hence willing to spend more money.
Start, Stop, Continue.
The key to success is to checkin on your progress and be open to change.
The idea of start, stop, continue comes from my corporate days when I’d have one-on-one meetings with my direct reports or customers. It works well in your personal relationships too.
On an interval of your choosing, but at least once per year, check in with your partner on:
- What should we start doing?
- What should we stop doing?
- What is working and so continue doing?
Maybe you’re spending is out of control so you want to start tracking your spending more precisely.
Maybe you’re not using a entertainment service so you want to stop your subscription.
Maybe you’ve maxed your 401Ks for the year but you want to continue investing so open a traditional or ROTH IRA.
Phew! That was a lot!
But you can do it. I’m proud of how far I have come and how far Mr. Scribbles and I have come together. The work is worth it.
