A good part of my “free” time in the past few months has been spent planning weddings for two of my children. It seems like its easy to spend lots of time planning for a wedding but not devote much time to planning for a marriage. Couples want their day to be unforgettable, but what lies ahead of them is far more important.
Their experiences will be quite different than those of me and my husband. Many people are getting married later in life, have vastly different career aspirations than we did, and are using technology in every way imaginable from planning their wedding to buying their first home.
Stop me now from going on and sounding old, but I do think they, and all of us, could use the opportunity to get back to basics a bit. I watch as they bemoan mortgage interest rates not showing any signs of coming down (little do they know we were buying our first homes with rates more than double what they are now) and in many cases, deal with student loan debt or stagnant salaries in some demanding careers. Through it all, I see a lot of commonalities and the principals of building a secure future remain much the same – budget, manage your spending, and plan for your future.
My kids have access to numerous apps and online resources for building a budget. It’s a far cry from how my husband and I had our first talk about budgeting. Thankfully, there was no arguing or lecturing, but a very light-hearted approach by my husband. He just asked me questions like “What do you think about water? Should we pay the water bill? I like water,” he said, “You can cook with it, drink it, and a shower is a good thing. I think we should keep the water flowing. What do you think?” I still laugh thinking about how he went through the electric, the gas, the car, the insurance. You get the idea.
There are endless articles and tutorials online about budgeting, some insist you pay your bills first, some insist you pay yourself first, some use a zero-sum approach…the options are endless. I warn my kids not to get drawn into information overload that causes them to freeze and do nothing because they can’t decide which path to take. Regardless of the tactic, the message is unavoidable – everyone needs to create a budget. If you find budgeting overwhelming, spend some time with a CPA or a financial planner. They love doing this stuff and I can refer you to some good ones.
Of course, a budget is a living document. No matter what you do, there will be spending involved. Some will be on necessities (the aforementioned water, electric, car, etc.) and some will be fun. Don’t forget the fun! Not very dollar has to go to needs. Our advice to the kids is try not to incur any credit card debt on the fun stuff. Paying current interest rates is not only not fun, but also a big obstacle to getting more needs and fun stuff in the future. It’s OK to spend, just spend wisely and where it will do you some long-term good. Treat yourself like a person of worth and take care of business first.
Getting started on investing is important but not every investment involves stocks or mutual funds. Spending on professional services like creating a will, trust, or estate plan is really an investment. Hiring a good CPA to help with tax planning or a financial planner to show you a long-term roadmap is an investment. Buying good life insurance policies is a good investment, too. There are some things that each of us is not good at. If it impacts your future, invest in paying someone who is good at it to get you where you need to be.
The problem some people have with planning is knowing where to start. How about this: Do you think about short- and long-term goals? If your household is similar to what mine was, you may be getting caught up in juggling work, kid’s activities, and family matters. What do you want to do this year, next year, five years from now, ten years down the line? Overwhelming? Take it in small steps. But be sure to give some thought to the most critical items (the ones you least like to think about unfortunately) like what would happen to your family if you died or got sick? Think about the exciting things, too, like aspirations, goals, money, and dreams. I deal with estate plans which requires two components – an estate (your assets) and a plan (see above). Think big and plan big!
Whatever generation you fall into (Baby Boomer, Millennial, Gen X or Z) there is a generation that came before you that you can learn from and a generation following you that might have some new ideas you can grab as well. Regardless of your age and situation, getting back to basics is a great way to make sure you’re on the right path.
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