Category Archives for "Finances & Careers"

Sep 27

Married Money Management Step 4: Pay Off Your Debt (Damn It!)

By Dustin | Finances & Careers

Pay Off Your Debts, Damn It! (here's how)Do you want to be debt free?

Seriously, do you really want to have freedom from monthly payments, calls from creditors and the feeling of being a slave to your lenders?

Well, I can tell you it’s absolutely worth the effort, but for most couples the journey toward debt freedom will be a difficult one.  It simply requires a lot of hard work and sacrifice, and you have to be fired up and passionate to make it happen.

If you can say, “I want to pay off my debts” and you don’t yet feel the urge to follow by screaming “DAMN IT!” then you may not be ready yet to make it happen.

If you think you have the burning desire required to kill your debts without mercy, then read on.

Why I Care So (Damn) Much

There are few topics that get me fired up as much as the idea of helping other couples experience the freedom and power of a debt-free marriage.  Bethany and I have been right where you are, and we may have been in worse shape.

Several years back, we found ourselves over $54,000 in non-mortgage debt and pregnant with our first child.

We were scared.  But we were also fired up and ready to make major changes for the good of our family.  I’d encourage you to read our entire debt-free story, but here’s the main points that you need to understand if you want to follow our path:

It takes passion, energy and commitment to pay off a large amount of debt.  And it takes a lot of hard work.  There’s really no substitute for effort if you want to make a major change in your financial future and live a debt-free marriage.

For us, this meant a firm commitment to incurring no additional debt and a new mindset focused first-and-foremost on paying off our stupid debts.  Practically speaking, the real key for us was building and strictly following a family budget that reduced our spending on things like shopping and eating out at restaurants.  We didn’t take vacations and we kept our entertainment on the simple side.  In a word, we got frugal.

I also worked a LOT, and we used any small amount of money we could come up with to pay off the next debt in our debt snowball (see below for details).  There weren’t many big moments of major progress.  Instead, it was all about being consistent and maintaining our intensity over the course of several years.

Now you know the basic strategy we used to get debt-free over a long and trying 3 1/2 year period.  Let’s dig a little deeper into why you want to accomplish the same.

5 Fantastic Benefits of a Debt-Free Marriage

1. Contentment

A funny thing happens when you get control of your money – you cling to it less.  With financial freedom comes a renewed focus on the things that really matter in life.  And when your values are in the right place, you depend much less on “stuff” and the false happiness that comes with it.

2. Communication

If you are married and you want to make substantial changes to your financial situation, you will need to talk…a lot.  The process of getting out of debt will require a real intimacy with your spouse and a deepening of the trust between you.  The spirit of teamwork you develop on your financial journey together carries over to other areas of your marriage as well.

3. Courage

If you have a lot of debt to pay off and/or you are already on a tight budget, achieving debt freedom will be a significant accomplishment.  When you meet a major goal, it fuels your faith in yourself and your ability to work alongside your spouse.  And it fills your relationship with the courage to face any challenge.

4. Change (for your whole family)

When you decide to shed your payments, you are breaking a cycle that most of us have witnessed throughout our lives, and you are setting a new example for your own kids.  With a solid financial plan, you’ll actually have resources available to help with your children’s future, retire with dignity and have the freedom of time to spend more with your family.

Personally, the best benefit that we’ve experienced since paying off our consumer debt is an increased ability and desire to give.  When we are generous with the gifts we’ve been given, we can change not only our own family tree but a little piece of the world as well.

5. Comfort

I will be the first to say that money doesn’t solve all of your problems, and no one should expect that debt freedom somehow brings instant happiness.  However, we certainly do sleep a little better at night knowing that we owe no one (other than our mortgage company :) ) and we have a healthy emergency fund in the bank.  This feeling of security and comfort is what financial peace is all about.

I’m Ready to Kick Some Debt-Ass…Tell Me How!

The bottom line to paying off debt is you need to live on less than you make and use the extra money to pay off your existing debts.  Wait, that’s not real exciting, huh?

Well, the somewhat sexier answer that we used to get out of debt is a little system known as the Debt Snowball.

Although my opinions vary in some cases from those of Dave Ramsey, I think he is spot-on in his advice for paying off all non-mortgage debts.  In his famous Baby Steps, he places the Debt Snowball as the second step along the journey.

While I’ve placed it at #4 in our Married Money Management series, I think his recommended system for getting debt-free is great.

To complete your debt snowball, you simply do the following:

  1. List all of your non-mortgage debts in order from smallest to largest.
  2. Pay minimum payments on all debts except the smallest one.
  3. Crank down your expenses and ramp up your income, throwing all extra money each month at your smallest debt.
  4. Once you kill your first debt, you take that extra money plus the old minimum payment and you kill your next smallest debt.
  5. You continue down your list and the “snowball” grows in size and picks up in its speed at killing debts.
  6. Keep it up until all of your non-mortgage debts are eliminated.
  7. Yell as loud as you possibly can, I’M DEBT FREE! (we actually did this live on Dave’s radio show to celebrate)

The process is easy, but the implementation is certainly not!  Again, the real key to making this happen is that old hard work and passionate sacrifice thing.

The reason I prefer Dave’s Debt Snowball approach to the many other options out there is its focus on motivation.

Mathematically speaking, the smallest-to-largest payoff loses out to an approach that attacks the debts with the highest interest rates first.  However, as Dave likes to say, if you were so good at doing math you wouldn’t be in this mess to begin with!

As an engineer, I resisted this idea for a while as we “played with” our debt payoff by putting a little extra toward our high-interest balances, while also saving some money, investing in retirement and maintaining an inflated lifestyle.  Well, it didn’t work.

Our real progress came when we put the math aside and went “all in” with intensity, focus and (frankly) anger at our debts and stupid mistakes of the past.

This is why we do Married Money Management step #3 before we pay off our debts and #5 (investing) after our non-mortgage debts are eliminated.  You need to focus on this Debt Snowball with all of your financial energies and let your momentum continue to motivate you as you kill your first debt and follow it up with larger and larger payoffs.

Can YOU Really Do This?

Hell Yes!

The real question for you is, “How bad to you want it?

Any other questions? 🙂

Please share your own debt-payment struggles and successes in the comments below as we break this vital issue wide open within our community!

Here’s a rundown of all the posts available to you in the Marriage Money Management series:

(photo source)

Sep 20

Married Money Management Step 3: Build A Starter Emergency Fund

By Dustin | Finances & Careers

Why You Need a Starter Emergency Fund - and How to Get itWelcome to Step 3 in our journey to financial success in your marriage!  Today’s lesson is pretty basic and extremely important.

We are ready to start increasing our net worth directly while putting our budget into practice to extract every last penny that we can to apply to our first major goal.  It’s time to build a starter emergency fund.

In most cases, your starter emergency fund should consist of $1,000 in a local savings or checking account that you can access quickly if you need it.  If you make over $100,000 in your household annually or you feel particularly vulnerable financially (such as having a single income or uncertainty with your career), then I’d suggest bumping this up to $2,000.

The idea is to have just enough money on-hand so that you can draw a line in the sand and stop depending on debt to deal with your “emergencies” once and for all.

If you aren’t willing to quit borrowing money, then I’d suggest you stop reading the Married Money Management series at this point because the rest of our plan for financial success simply won’t apply to those who want to live the rest of their lives in debt.

For those of you who are ready to kill your debts and live the rest of your lives free of that bondage, you’re gonna love this program! 🙂

Why $1,000 and Why Now?

When I first started following Dave Ramsey’s Baby Steps, I wondered why a starter emergency fund was placed before attacking high-interest debt, which is costing you tons of money each month to carry.  I also questioned the sense of only having $1,000 on-hand for the long journey (for us) toward debt freedom.

Well, the starter emergency fund is vital because it allows you to break your dependency on credit cards or lines of credit every time an unexpected expense comes up.  With $1,000 in the bank, you don’t have to panic when the starter goes out on your car or your child has to go to the doctor.  It’s enough to cover the “little emergencies” that will surely come up from time-to-time.

If you use any of your starter fund, you simply pause your debt snowball (which we’ll cover next week) and rebuild it back to the $1,000 or $2,000 level before moving forward.

So, why not be even more secure and save up $10,000 at this point?  For one, you don’t want to delay your debt pay-off too long and the beauty of this system is that we focus on one major goal at a time, and this allows us to get the starter emergency fund in place and then move on pretty quickly.

However, the biggest reason is that you don’t want to be too comfortable while you’re paying off your debts in the next step.  When you know there’s only $1,000 of cushion available, it increases your urgency in killing your debts and it ensures you don’t get too soft in your focus in meeting that major goal.

Easy Enough, Right?

It doesn’t get much more simple than saving up $1,000 in your local bank.  For some of you, this will take a few months and require sacrifice.  For others, you may have more than this already saved up.  Well, stay tuned because you’ll be asked to withdraw any “extra” savings next week so we can jump-start our efforts at getting you a debt-free marriage!

I can’t wait to share my favorite step with you:  Kill Your Debts (Damn It)!

Here’s a rundown of all the posts available to you in the Marriage Money Management series:

(photo source)

Sep 13

Married Money Management Step 2: Take Inventory and Get Current

By Dustin | Finances & Careers

How to do a Money Inventory and Get CurrentIn Step One, we looked at the importance of making a budget as the critical first action to achieving financial success in your marriage.

Today, we’ll take a look at the next “baby step” on your journey to meeting your goals with money.  If you find that you are beyond these early milestones, please share your success in the comments below and stay tuned as we’ll catch up with you soon.

After your budget is in place, it’s time to stare into the face of your financial reality.  For many of us, this can be a scary proposition as we’ve conveniently put aside any real thought about our money management and the current status of our accounts, bills and debts.

It’s time to figure out exactly where we stand in our family finances.

Take a Financial Inventory

If you haven’t paid much attention to where you stand, I know it can be intimidating, especially if you have significant debt.  Fortunately, Bethany and I were never behind with our bills or late on any accounts.

However, I still remember the day I totaled up our outstanding consumer debts (debts other than a mortgage) and had a short panic attack when the calculator showed more than $54,500!

How did this happen?  We were doing well financially…except in reality we were not.  When we added up our miscellaneous debts such as car loans, student loans, furniture loans, small credit card balances and even a 401k loan (gasp!), it hit us hard.

We had A LOT of debt over our heads, and we were expecting our first child at the time.  Big Time Eye Opener!

If you haven’t already done so, make a list of your outstanding debts and get current balances on each.  This list will be very important in a few weeks as we begin to attack every debt and KILL IT permanently.  But for now, our focus is on getting a solid handle on where we stand.

It’s time to take a full financial inventory to get a clear picture of the following:

  • Non-Mortgage Debts
  • Mortgage Debts
  • Savings Accounts
  • Checking Accounts
  • Savings Bonds
  • Cash Savings
  • Insurance Policies
  • Retirement Accounts
  • Estimated Value of Your Assets
  • Monthly Income & Monthly Expenses (this should have been done with your budget)

This is also an excellent time to pull a copy of your credit report to check it for errors.  Your credit report will also give you a full listing of your outstanding loans.  You can get a free credit report from each of the three major credit reporting agencies once per year at AnnualCreditReport.com

Once you have a tally of your assets and your liabilities (debts), you can calculate your current net worth.  This is the best measure of your financial progress over time since it reflects both the reduction in your debt load and the increase in your savings and investment values.  I really like this net worth calculator from Bankrate to guide you through the details.

Be sure to write down your current net worth and today’s date so you can look back at this number and celebrate your achievements as we move forward!

Get Current On Your Bills

Before we move forward increasing our savings and paying down our debts, though, it’s important that we first get current with all of our creditors.  If you are behind on any bills, it’s time to get caught up and start making the required minimum monthly payments.

In the case of very old debts that haven’t been paid in a long time, there’s a chance that the creditor will settle the account for much less than the total outstanding balance (especially when interest and penalties are included) since they’ll be happy to simply get paid anything.  If you are facing this situation, it’s important that you call each creditor individually and strike a deal before moving onto the next.  You don’t want to “reawaken” a bunch of creditors at the same time!

Although it can be tempting to turn away from the mess of past due bills and let someone else take care of it, the reality is that debt consolidation companies are not all that they advertise to be.  If you are seriously behind, I’d encourage you to read more about the truth behind these companies and seek a financial counselor to help you get current.

What Do You Think of Your Net Worth?

If this is the first time you’ve calculated your net worth, you may be wondering whether it’s good or bad.  You can check out the typical net worth of Americans in your age range and salary level at this website to get a relative idea of your current standing.

However, the really important measure of your net worth is how much it increases over time.  And we’ll be starting to work on that in Step 3!

Here’s a rundown of all the posts available to you in the Marriage Money Management series:

(photo source)

Sep 06

Married Money Management Step 1: Make a Budget

By Dustin | Finances & Careers

Welcome to the first installment of the Married Money Management series here at Engaged Marriage where we take a look at the keys to financial success for married couples.

How to Make a Budget that Works!The first and most important step to achieving financial success in your marriage is to make a budget.

Put simply, a budget allows you to tell your money where to go instead of wondering where it went.

Some couples are reluctant to create a budget for their household finances because they think it’s too difficult, too confining or they honestly just don’t want to know how poorly they’ve been handling their money.

While I can definitely relate to these feelings, the fact remains that creating a budget and living with a plan are absolutely essential.

Our First Big Mistake!

In the first few years of our marriage, we thought we could live just fine without a budget.  Believe it or not, I actually read Dave Ramsey’s Financial Peace right after we got married when a co-worker suggested I give it a look.

Well, I loved the book and thought Dave’s advice was excellent.  We decided we’d try some of his strategies…but we thought we could do it without bothering with a budget.

We’ll get much deeper into our own story as this series progresses, but suffice it to say that doing things our way resulted in the accumulation of more than $54,000 in debt and years of unnecessary financial stress.  Knowing what we know now, this is really frustrating.

In hindsight, it’s very easy to see where we went astray.  We skipped the most critical step in the journey to financial peace. We were too stupid and stubborn to create a budget for our household.

Please don’t repeat our mistake.  If you desire more financial success, you must have a budget!

Budgeting Basics

Based on the reactions I’ve heard from both close friends and Engaged Marriage readers, I know that some couples are intimidated by the idea of a budget and feel that it’s too complicated or cumbersome for them to take on.

Please know that a budget can be as thorough or basic as you decide to make it.

Basically, a budget is a summary of your financial “ins and outs” during a given month.  You just write down all of your income for the month and all of your expenses and you have a record for that month.

When you use that information to plan ahead for the next month, you’ve got yourself a budget!

This can literally be as simple as writing down your income and expenses on a sheet of paper.  The key is to track your expenses for a few months so that you can accurately project your needs for the next month.

The most basic way to do this is to keep receipts for all of your expenses for two months.  You can then use this information to establish a baseline in your spending habits.

Take a look at these habits and decide if and where you need to make cuts to meet your goals or if you need more income.  Put the revised spending and/or earning amounts down on paper to plan for the next month, and your budget is all set.

A budget does not have to be complicated or overly detailed. 

It must account for every dollar you earn and spend, and it must be agreed upon as a couple.  Aside from those two basic rules, it can take any form that you desire.  And please note that it will likely take several months of trial and error before you zero in on an accurate budget.

Bethany and I used homemade Excel budget spreadsheets and manual tracking of our receipts for several years.  It worked just fine, and it provided the information and motivation that we needed to attack our debt and live within our means.

We have since “graduated” from those manual efforts and realized the power and (awesome) simplicity of using budgeting software.   I’m now convinced that this is the best solution for most couples, and it makes things SO much easier that I feel it’s a no-brainer to invest a few dollars to get started with a solid budget software.

Budgeting Tools Are Your Friend

There came a time after we became debt-free that we found ourselves slipping back into old habits and getting sloppy with our budget. It was then that I decided it was time to look into options beyond our Excel spreadsheet and keeping a receipt for every purchase we made to track our spending.

Frankly, we had become so busy and bored with this approach that we would sometimes get a month or two behind in tallying up our spending and fail to even plan ahead, which defeats much of the purpose of budgeting.

Even though we used these manual methods of budgeting to get out of debt and meet other financial goals, we decided it was time to use technology to our advantage and make our efforts more sustainable.  I tried out most of the popular options for budgeting software and wrote a review based our experiences.

I encourage you to read my budgeting software reviews and see which option fits your family’s needs.  Any of these options (free or premium) make it so much easier and less time consuming to get your budget working versus doing it on your own.

After a lot of research and trials, we found that the best budgeting tool for our family is a software called You Need A Budget.  I can’t say enough good things about YNAB, and they now have iPhone and Android Apps available to make it even easier to track and plan.  Plus, when you use this link, you’ll save $6!

If you think that budget software would be helpful in your situation, please take a moment to read my full review of You Need A Budget based on our experiences.

If you decide to give YNAB a try, you’ll be able to get started on your budget today by importing your electronic transactions from the past two months to know where you’ve been with your spending.  As a couple, you can then decide what needs to change, quickly set up a plan for next month and then start following it.

You could literally have your budget ready to go in a matter of a few hours using this technology.  While premium software like this is not free, we’ve found that it’s money well spent.

In most cases, you’ll save much more than the software cost simply by getting started and tracking your spending, earning and saving habits.  Plus, using this link, you will save $6.

Budgeting Benefits for Your Marriage

The benefits of budgeting within marriage actually go way beyond laying the foundation for financial success.  Budgeting your money can actually be an awesome way to enhance the communication and trust in your relationship.

Build Communication

If you are married, both spouses should have input in the budgeting process.   This is really a critical component of any budget that is actually going to work, which means that it is respected and followed by the entire family.

After all, why would you follow a plan that you may not agree with or that you feel has been forced upon you?

This is why communication is key to the budgeting process.  You and your spouse need to sit down together and discuss your financial goals and decide in advance how you want to use your money.

This doesn’t mean that you have to combine all areas of your financial life or change the way you spend money.  While there may certainly be value in doing so, you can build your budget to accommodate joint or separate bank accounts, cash or credit card spending, and frugal or extravagant spending habits.

After all, this is your budget designed for your particular family’s situation.  You are in control…together.

It’s also totally fine if the “nerdier” spouse wants to create the draft budget and then get input from the other.  But there must be input and “buy-in” from both husband and wife that the final budget is a spending plan that they agree to stick to.

Again, this could be a plan to spend beyond your means and rack up crazy amounts of debt.  I hope it’s not, and most couples don’t plan to go deeply in debt, but the point is that you will communicate about your goals and decide together how to use your family’s financial resources.

That is the real beauty of building a budget for your own family and your own situation.

Build Trust

After you’ve sat down together and figured out your spending plan for the coming month, it’s time to put your money where your mouth was and spend as you have both agreed.

When a budget is in place, you can feel good about spending as you have planned.  However, you’ll have accountability to deal with when you are tempted to go astray.

Think back to the last time you spent a lot of money on something impulsively without talking to your spouse first.

Was it part of your overall financial plan?  Did you have a bit of buyer’s remorse afterward?  How did your spouse react when they found out about your big purchase?

You and your spouse create the budget and you control what it says.  However, once you agree to it and you commit to each other that you’ll stick with the spending plan, you have an ongoing promise to your spouse to uphold.

That doesn’t mean that you can’t buy something that’s not part of the budget.  However, it does mean that you need to give your husband or wife a call to make sure they agree there’s good reason to change your mutual financial plan to accommodate it.

And the two of you can decide on the limit where the other needs to be consulted when a “spending audible” gets called.

Simply put, it means that you must trust your spouse to be financially responsible, and you must hold up your end of the agreement to them as well.

Communication builds a budget and trust makes it work.

Go Take The First Step Today: Build a Budget!

Regardless of whether you decide to start with a pen and paper or a software tool, the most important takeaway from this post is that you must have a budget.  It’s vital for your financial success, and it’s a valuable marriage-building practice as well.

If you already have a budget, that’s fantastic.  Take some time to review it together and decide whether it still meets your needs and financial goals.

If you don’t have a budget yet, please do your marriage a favor and go get one!

After all, it’s the first step to effective Married Money Management.

Here’s a rundown of all the posts available to you in the Marriage Money Management series:

(photo source)

Sep 02

Announcing Married Money Management: 9 Steps to Financial Success

By Dustin | Finances & Careers

Marriage and MoneyIn the early years of our marriage, money was not a fun subject as we struggled with a lot of debt and only a little understanding of the importance of financial harmony in our life together.  We had no plan and just followed the (really, really poor) example of money management we witnessed among our friends and in our culture as a whole.

Fortunately, we learned a lot along the way and now enjoy a great deal of freedom in the financial area of our marriage.  We’re debt-free and honestly never argue about money.

I want to share our journey and give you the guidance that I wish we would have had before we were married nine years ago. Like our own path, this journey will generally follow the advice of Dave Ramsey’s Baby Steps, but it will include our personal experiences and specific advice for engaged, newlywed and not-so-newlywed couples.

To give this important topic the attention it deserves, I plan to break it all down into (at least) nine different posts.  I’ll begin sharing this series on Monday, and we’ll look at a new step along our financial journey each week for the next two months or so.

There are three things you should know before we get started:

  • I am not a financial counselor or professional, and you should view this information only as input from a friend who has “walked a mile in your shoes.”  I take no responsibility for your application of the information.  OK, end disclaimer. 🙂
  • If this interests you, I’d strongly suggest you sign up to receive free updates when new posts are published.  You can do so via an RSS reader or have them sent right to your email.  This is the best way to ensure you don’t miss a post.
  • If you know of an engaged or married friend that could benefit from this series, please share this post with them so they can get signed up for the series.  You can email them a link or use the Facebook or Twitter buttons below to spread the word.

I’m super excited to write a meaningful series that I really hope you’ll enjoy.  I’ll see you on Monday for our first step along the journey.

In the meantime, please take a minute to share any specific financial questions that you would like addressed in the comments below.  Or just share you thoughts on whether you think this series is a good idea.  Thanks!

(photo source)

Jul 22

Want a Better Marriage? Learn About Money!

By Dustin | Finances & Careers

Marriage and MoneyEditor’s Note: This is a guest post from Anthony Kirlew of Life is a Bank.  I am passionate about the need for quality financial education among married couples, and I think this post provides a great overview of the areas that you need to understand.  I’ll be back from my brief “paternity leave” on Monday. Enjoy!

Money is at the top of the list of issues that married couples argue about.  There are a host of money-related items to disagree about from not having enough money to differences in how to use the money that they have.

One way to reduce – and ultimately eliminate – these unwelcome interactions is to be open with each other about your “financial IQ” and set out on a course of learning about money and personal finances together.  That said, here are a few things to keep in mind.

First, both spouses may not have a genuine interest in personal finances (such as the case with my wife).  I would recommend that each spouse really makes an effort to learn the basics and more if possible.  We have all heard the story of the widow whose husband handled all of the finances and when he died, she was left not knowing anything about their finances (which included not knowing about his life insurance or his will).

Secondly, you each might have different learning styles, so what works for one may not work for the other. The good news is that financial education comes in many forms including books, videos, personal finance blogs, seminars, and one-on-one sessions with financial professionals.

The Money Basics That You Need to Know

So what should you seek to learn about with regards to money?  Here are my recommendations:

Budgeting

My philosophy on budgeting is to run your family budget like a business budget.  Your salary (income) is your accounts receivables (money coming in) and your bills or expenses are your accounts payables (money going out).  The receivables HAVE to be greater than the payables.

If not, you have three options: increase the receivables, decrease the payables, or do a combination of both.  You can increase receivables by putting in extra hours at work, taking on a second job, or starting a side business. You can decrease payables by looking at what you are spending and finding areas to cut back such as not having a $4 coffee every morning, not having multiple premium cable channels, or canceling gym memberships you don’t use.

(Note from Dustin: In my opinion, all financial success starts with a solid budget and open communication. Personally, I’ve tried a lot of approaches, and I feel that You Need A Budget is the best option out there for budgeting software.)

Credit

Learn the power of having and maintaining good credit. In a perfect world, we would not use credit, but if you need it, you will pay far less for the money you borrow if you have good credit.  The solution to maintain a good credit rating is never taking out a loan you do not have the means to pay back and always paying back your loans on time.

Savings

There are several different forms of savings from the emergency fund to a 3-6 month reserve, to long-term savings for major purchases such as a down payment on a home. It is important to establish your personal savings goals, and learn what financial vehicles exist to help you save.  You might be surprised to find certain financial instruments (such as insurance policies) that can serve more than one purpose such as helping you save while also providing a death benefit.

Debt Management

If you have debts, make sure you know the fastest way to pay them off.  A great way to pay off your debts is to use the debt snowball method where you pay off the lowest balance debt and then add that payment to the payment of the next debt on the list which allows you to continue to make larger and larger payments on your debts which knocks down the balances faster. Using the Infinite Banking Concept, you can possibly take this to the next level by paying off the debt snowball with a loan from yourself (more on that later).

(Note from Dustin: Our family used the good, old-fashioned Debt Snowball to pay off our debts, and it was one of the best decisions we ever made.  We did not leverage our efforts through the use of loans back to ourselves, as suggested here, and I am not endorsing that approach.)

Insurance

Although many people don’t like talking about insurance, you need to make sure you understand what you need and what you don’t need. There are some types of insurance that you cannot live without (by force) such as car insurance and homeowners insurance. But what about life insurance, renters insurance, health insurance, and the like?

I could write a whole blog post on just insurance alone but suffice it to say, you need to have an understanding on what is available and what will benefit you in your current situation and down the road as your needs change.

Investing / Retirement

I put these together because ultimately your investment activity should be building your nest egg or retirement fund.  There are lots of different types of investments out there and I will just say this; if you don’t fully understand what you are putting your money in, why you are doing it, and what the outcome will be, don’t do it.

In general, I would stay away from stocks and mutual funds because they are really a gamble (and this is my personal opinion and experience, not investment advice). One of the best investment vehicles that I have personally found are dividend paying whole life insurance policies.  Many will tell you that they are not a good investment and that you should “buy term life and invest the difference” but I will tell you that most people never invest the difference, and those that do have taken huge losses by listening to the “gurus” that preach this because their mutual funds tanked.  Dividend paying whole life insurance companies have produced positive returns for years – even during the great depression.

(Note from Dustin: I felt the need to interject here to let you know that I am personally in the “buy term and invest the difference” camp on this issue, so that’s the approach our family has taken.  However, like most issues, I like to be open-minded and invite opinions that are different than my own, so here you go. 🙂 )

The Infinite Banking Concept

This is a term that you may not be familiar with, but it is a financial strategy that I am personally passionate about. It is through the Infinite Banking Concept that you are able to leverage certain aspects of insurance policies to create a personal financing system with the additional benefits of retirement funds as well as a death benefit to leave to your family when you graduate from this earthly life. Of all of the arenas of personal finance I mentioned to study, I would put this at the top of the list because it will empower you to accomplish all of the others more efficiently from savings to paying off debts, to building a retirement fund.

(One final note from Dustin: Again, I have not used this Concept, so I cannot personally endorse it.  I tend to prefer to keep things fairly simple with our finances, but I also don’t discount other ideas on the sole basis that I don’t have any experience with them.)

As with any new venture, remember that mastering your personal finances is a process and not something you need to become overwhelmed with.  Take it one step at a time and every step you take will get you closer to achieving your financial goals.

Those that master their personal finances carry less stress and enjoy life more than those who are always broke or just getting by.  In the end, the financially educated have happier and healthier marriages as well – and that is my wish for you!

(photo source)

___________________________________

Anthony Kirlew is the Chief Marketing Officer for Life is a Bank, a financial education firm that specializes in helping people “become their own banker” through the power of the Infinite Banking Concept. Anthony has worked in the financial services arena for several years specializing in real estate, mortgage banking, insurance services, and as a personal finance blogger.  A lifelong entrepreneur, Anthony has also been a professional online marketer since 1999.

Jul 04

Finding Financial Freedom with You Need A Budget

By Dustin | Finances & Careers

Happy Independence Day to my fellow Americans!  I hope you are enjoying some fun family time over this long weekend and remembering all those who fought and continue to fight to preserve the awesome freedoms that we enjoy each day.

We are opting for more time indoors than usual this holiday weekend while we anxiously await the arrival of our third child sometime in the next week or two.  Thank God for air conditioning! 🙂

When I think of our family’s own freedom, the thought of finances always comes to mind.  As you may be aware, we paid off a LOT of debt and now enjoy much more financial freedom, and that carries through to all aspects of our marriage and family life.

I recently shot another video where I discuss the number one cause of divorce in America and why I think You Need A Budget is such a great tool for addressing this important problem.  And here’s another reason to celebrate: I just purchased a new video camera so this is the last really low-quality video post you’ll see from me! 😉

Please feel free to leave your thoughts in the comments, and if you’d like to see all of my Engaged Marriage videos (some of which don’t find their way to the blog) please subscribe to our YouTube channel.

[youtube]http://www.youtube.com/watch?v=S-DTQYqS9gk[/youtube]

If you can’t see the video, just click here: You Need A Budget Review: Married Money Management

Thanks for your continued support!

May 19

Get Rich Slowly Giveaways!

By Dustin | Finances & Careers

I am excited and quite honored to have a post featured today at Get Rich Slowly.  Please head over and share your thoughts in the comments of “6 Steps to Strengthen Your Family on the Journey to Financial Freedom.”

In honor of the occasion, I have some great giveaways to share…so please read on and enter to win!

Welcome to Our Friends from Get Rich Slowly

If you are a new visitor from Get Rich Slowly, I’d first like to welcome you to Engaged Marriage!  I encourage you to take a few minutes to look around, and I think you’ll find an awesome community of proactive people who love their marriage and family life.

If you like what you see, I’d also encourage you to sign up to receive free updates via RSS or Email whenever new posts are published here at Engaged Marriage.  If you’re really serious about getting killer content and exclusive advice aimed at helping you have an awesome marriage, please sign up for our free Marriage Time newsletter.

If you love finances as much as I do, I hope you’ll enjoy these posts:

Giveaway Number One – Your Money: The Missing Manual

J.D. Roth is the creator and lead writer over at Get Rich Slowly, and he recently released his first book.  Your Money: The Missing Manual has really been a hit, and it’s no surprise to me as J.D. is a dependable source of sensible advice for getting the most from your money.

In honor of J.D. accepting my post to share with his community, I wanted to share his fantastic book with the community here at Engaged Marriage.  More specifically, I want to give the nearly 400 members of our awesome Facebook page a special chance to win a cool exclusive giveaway.  If you want to join in, just head over and “Like” our page to join in all the fun we have there.

Let’s give away a killer book!

To enter to win Your Money: The Missing Manual, just do the following:

  • Head over to the Engaged Marriage Facebook page and leave a comment under the (very obvious) giveaway post there on the wall.
  • After you post on the Facebook page, you’ll get a bonus entry by tweeting the following message: Enter to win a FREE copy of “Your Money: The Missing Manual” from @EngagedMarriage http://wp.me/pEBYt-s3 #giveaway

I will randomly select one winner from all of the entries, and they’ll receive a free copy of Your Money: The Missing Manual!  The contest ends at noon CST on Friday, May 21st so act quick!

Giveaway Number Two – The Total Money Makeover

If you’ve read Engaged Marriage for very long, you know that another favorite financial book of mine is The Total Money Makeover by Dave Ramsey.  After all, it was Dave Ramsey who laid the groundwork and provided a lot of the motivation that we used to pay off all of our debt (other than our mortgage).

I want to give away a copy of this life-changing book, and I want to make it a special giveaway for our awesome Marriage Time newsletter subscribers.  Again, if you want to enter the giveaway, I encourage you to sign up for the newsletter.  I guarantee you won’t regret it, but if you do unsubscribing is always as easy as a click of the mouse.

To enter to win The Total Money Makeover, just do the following:

  • Reply to the welcome message email (which contains Marriage Mojo lesson one) you get when you confirm your subscription to the Marriage Time newsletter.  If you are already a newsletter subscriber, just reply to any previous email message and put “TMMO” in the subject line and you’ll be entered.
  • After you reply by email, you’ll get a bonus entry by tweeting the following message: Enter to win a FREE copy of “The Total Money Makeover” from @EngagedMarriage http://wp.me/pEBYt-s3 #giveaway

Again, I will randomly select one winner from all of the entries, and they’ll receive a free copy of The Total Money Makeover!  The contest ends at noon CST on Friday, May 21st so act quick!

Giveaway Number Three – You Need A Budget

In case you missed it, I wanted to remind everyone that we have yet another fantastic financial giveaway going on this week.  Please read my review of You Need A Budget and enter to win your own free copy of the awesome YNAB budgeting software on that post!

Thank you to J.D. Roth and all of the great members of the Engaged Marriage community for your continued support.  Good luck winning one of this week’s special “Get Rich Slowly” giveaways!

May 17

You Need A Budget: Money Management for a Happy Marriage

By Dustin | Finances & Careers

(Save $6 when you click this image)

You Need A Budget (YNAB) is the best budgeting software I have ever used.  In fact, YNAB is so awesome that my wife even likes it!  But more on that later…

If you are a regular reader here at Engaged Marriage, you may recall several recent posts about our search for budgeting software that met our needs as a busy family.

After many years of faithful budgeting that allowed us to pay off $54,500 in debt, we recently started to slip up in our spending and planning.

In a quest to find the right software to get us back on track, I reviewed 5 of the top budgeting tools on the market and wrote my opinions of them.  Each had their strengths, and many offered a way to track spending and plan for the future with far less time and energy than I had been spending with my homemade spreadsheets and manual receipt tracking.

The Best of the Best

After I did that initial review, I basically narrowed things down to just two choices that seemed like the best fit: Mint and You Need a Budget.  Well, after trying them both out and putting them to the test, I’m confident that we’ve found the right budgeting tool for our marriage.

While I enjoyed Mint’s online access and the overall picture it provided (including retirement accounts and other investments), I felt that it came up short in the primary area that we’re concerned with, which is budgeting.  Mint doesn’t “look ahead” and it makes the process of planning for the future quite cumbersome.  It’s not bad for a free service, but it simply didn’t stack up to YNAB.

You Need A Budget does all of the things you’d expect a premium budgeting software to do:

  • It allows you to import your banking transactions as you wish (with no need to give up account passwords like you do with Mint), so you never have to worry about saving receipts for every nickel you spend day-to-day.  Plus, with slick iPhone and Android apps (plus Kindle Fire), keeping track of your budget on the go is super easy.
  • It makes it easy to categorize your purchases for simple budgeting on the “envelope system” (without the need to carry around envelopes…unless you want to).
  • It lets you know when you are overspending on a certain category and lets you balance your budget on the go.
  • It allows you to plan ahead to save for large purchases and  irregular expenses.
  • And it gives you the insight you need to make wise decisions about your family finances.

Sounds great, right?  Well, what makes You Need A Budget superior is all that is goes well beyond the basics of normal spreadsheet budgeting!

The Four Rules for Financial Success…

OK, this is where the nerd in me really gets excited. 🙂

If you don’t already know that having a budget is the first step to financial success, well now you do.  Seriously, you really do need a budget.

So whether you use a great software like YNAB or you just write everything down on a piece of paper and track your spending manually, please know that you must have a budget if you want to achieve any level of financial freedom.

The budget is a great tool for identifying how you are spending your money.  However, the real power in budgeting is the ability to plan ahead and change your behavior to achieve financial goals.

I want you to read the following four principles for sound money management and think about how important they are for success in personal finance…and marriage.

1. Stop Living Paycheck to Paycheck

2. Give Every Dollar a Job

3. Save for a Rainy Day

4. Roll with the Punches

Pretty killer financial principles, right?  Well, the best part is that they…

….Are Built Right In!

Do you want to know why I’m so excited about You Need A Budget?  It’s because these Four Rules are built right into the software!

I encourage you to head over and read more on the You Need A Budget website (save $6 when you use that link!), but here’s a quick overview of  why these “rules” matter and how powerful they really are:

1. As you start using YNAB, the software will literally guide you to help you get ahead by a month (so you use May’s paychecks to pay Junes expenses, for example).

This will give you breathing room and allow you to stop wasting time by timing paychecks with bills.  Plus, if you’re on a variable income, your budgeting “problem” will be eliminated.

2. It helps you put every dollar to work with a specific purpose and plan.  Your financial awareness will increase tremendously, and you’ll find contentment as your spending aligns itself with your core values.

Communication between spouses about money can be restored in the process.

3. The software lets you anticipate and save for larger, irregular expenses so you’ll be ready.  This helps you eliminate the crazy ups and downs in your spending, and it lets you see a true picture of your discretionary income.

You can enjoy opening the mail again when the money is there waiting to pay the bills as they arrive.

4. We all mess up, and we all overspend from time-to-time.  The key is to stick with your plan over the long-term and maintain consistency.

YNAB helps keep you moving when you fail so you don’t quit, and it lets you start each month with a clean slate, which is a huge psychological boost.

Again, when you visit the YNAB site, you’ll find great videos that go over each of these points in detail.  I think you get the idea though, and I hope you can see why this makes me so excited.  OK, so no one probably understands that, but trust me when I say that I think this built-in methodology is sweet! 🙂

Purchase, Installation and Use

The You Need A Budget website is the place to go to read, listen to or watch tutorials that will show you everything you want to know about the software.  However, I want to hit the high points here for your convenience.

  • Purchase – YNAB is sold for a one-time fee.  Many of the other premium software packages require monthly fees, but if you are sticking with it for the long-term (as you should), then a one-time fee is certainly the way to go.  Plus, I’m convinced that one month of living “on a plan” will more than pay for the price of the software.

Also, you can try YNAB free for 34 days with no obligation (they don’t even take any payment information up-front), which is a great way to see if it fits your needs.  Plus, they offer incredible (free) support.

BONUS – I’m an official partner of YNAB, so when you use this link, you’ll save $6 on the cost of the software!

  • Installation – I found the installation to be a snap.  And the software did some cool things like automatically set up defaults so when I go to my bank’s website to download transactions, they pop right into YNAB in the right format.
  • Use – You Need A Budget is primarily desktop-based software, which originally concerned me because I didn’t know how I’d access it from both my home and work computers.  However, they’ve thought of that, too!

When you buy a YNAB license, it allows you to install the software on as many computers as you’d like, and with their CloudSync technology, you can hook it up to a free Dropbox account and keep your budget synced in real time on all of your devices!

So, I have YNAB on both of my computers, and I just keep our budget file on a flash drive so I can open, change and save it wherever I’m at.  I also picked up their iPhone app (also available for Android and Kindle Fire) so I can budget on the go.

So Awesome Even My Wife Likes It!

By now, you surely know that I’m a bit of a geek.

After all, I created our original budget spreadsheets and went through years of pain to track our spending manually while trying to plan ahead for our family finances.  And I didn’t mind it until I got so darn busy that I couldn’t keep up using those methods.

Well, you may not know that my wife is what Dave Ramsey would call a “free spirit” at heart.  She wants our family to be comfortable and she’s not an irresponsible person.  However, to say that she enjoys budgeting or has any desire at all to track spending on a spreadsheet would be a major stretch!

After I got YNAB installed and had a chance to play around with it for a while, I decided I just had to share it with Bethany even though I figured she’d think I was asking her to watch paint dry.

Well, I have to say that she actually complimented the look, feel and functionality of the software.  And she said it was something that even she could stand to use! (yes, that is a ringing endorsement of a financial product coming from her 🙂 )

If you aren’t the “budgeting type,” I would encourage you to give YNAB a try.  I really think anyone can intuitively “get” the budgeting process and, more importantly, achieve success in their financial planning using this awesome software.

The YNAB website and the software itself are packed with excellent resources to teach you about not only the software but financial planning as a whole.  They even have free forums, a blog, live online classes and a free “YNAB University” where you can gain a wealth of great information all at your own pace.

The Bottom Line

I could seriously write about this software and the topic of achieving financial freedom all day.  However, the YNAB website has all of the details you’d ever want to know about their product, and I have plenty of time to write posts about money.  Here’s the bottom line in my opinion:

  • You (really do) Need A Budget.
  • You also need a solid financial plan and goals for the future.
  • If you want to use software to aid you in the process, YNAB is the best product I have found to get the job done effectively.
  • Whether you use YNAB or not, please start addressing your finances today.  Your marriage will benefit more than you can imagine.

I’d love to hear from you in the comments to this post.  Please post a financial goal that you are currently working on with your spouse or fiance.

Here’s wishing you success with your money and your marriage!

Apr 20

The Grass is Always Greener…and I Don’t Give a Damn!

By Dustin | Finances & Careers

The Grass is Always GreenerWe’ve all heard the expression “The Grass is Always Greener on the Other Side” throughout our lives, and I actually find it to be a useful mantra whenever I start feeling sorry for myself.  It is so easy to lose sight of our blessings and develop a jaded perspective, particularly when we’re faced with examples of the situations we do not find ourselves in.

I was (again) reading Your Life. Live it. Love it. recently, and a particular chapter really resonated with me.  A passage called “The Grass is Always Greener Right Under Your Feet” serves as an awesome reminder of just how powerful our own perspective can be when it comes to our happiness.

My life is full of examples of “what ifs” and “if onlys” and I’d like to share a few with you to see if you can relate.  I’ll take a peer over into my world from the perspective of someone with beautiful, free, single, wealthy, independent and uninhibited grass.

And then I’ll tell you why I don’t give a damn about their green grass!

Marriage is Hard

I got married when I was young and straight out of college.  If I wouldn’t have tied myself down, I could have spent the last nine years living an independent and free lifestyle.  I could have experienced relationships with many different women, spent a lot of fun times with my buddies and probably improved my golf game considerably.

I could have traveled extensively and experienced all that the world has to offer.  Incredible opportunities for wealth and entrepreneurial success would have been mine for the taking, and I could have taken part in all of the amazing adventures that I have only read about in books.

Kids are Expensive

I have two small children and one on the way.  The sacrifices that my children require in time and loss of independence are really incalculable.  The constant pressure and burden of providing for their every need is really stressful, and it makes it very difficult to care for myself and experience any truly free time.

My kids also cost a lot of money.  Their childcare costs alone would allow me to live in a house that costs more than twice my current home.  If I didn’t have the ongoing expenses associated with their food, clothing, entertainment and activities, I would have amassed a very nice nest egg by now.  And I’d be driving a sweet ride that didn’t require car seats.

Responsible Adulthood is Confining

I have a lot of stress in my life that is caused by all of the things I choose to do as a “responsible adult.”  Aside from spending a lot of time with my wife and children, I have a full-time professional career, a growing blog (about marriage of all things), church activities, community service and commitments of time to my extended family and friends.

If I instead lived at home with my parents and spent my time doing only the things that I enjoy, I would have an incredibly flexible and stress-free lifestyle.  I could drink beer and play video games late into the night, and I’d be able to take a trip to Vegas or go on a ski trip in the Rockies at the drop of a hat.

I would have the life that poor schmucks with a 9-to-5, a mortgage and tee-ball coaching duties can only dream about.

If only…I’d have a great life!

I Don’t Give a Damn About That Grass

I love my life.

When you peer over a proverbial fence and look at my yard with a judging eye, you’re likely to see some rough patches, some areas that have been neglected for lack of time and several crazy kids running around making a lot of noise.  My property isn’t as large as some, and it has some fences around it that may make others feel a bit trapped.

But it’s my grass, and it represents all that makes life so precious in my world.

  • That free and independent lifestyle would not have fulfilled me and given me unconditional love for the last nine years.
  • That big house would feel really empty without happy children and a beautiful wife inside.
  • Those trips around the world would be worthless within a life that has no meaning.

The grass will always look greener on the other side…and I don’t give a damn.

Instead, I thank God for every beautiful blade of grass that I find on our side of the fence.

Can you relate?

What part of your “lawn” do you love even though others may view it as weeds?

Please share your thoughts in the comments!

Photo by Geoff Penaluna