Keys to Financial Freedom: Part One

Laura and I have both blogged before about finances, but given that it is one of the most common causes of strife in marriages, I want to come back to this topic. Money, and the lack of it, is a tough topic in almost every relationship. It certainly has been one for us at different times in our marriage. I always say communication is key, and it really is. This is the first post in a four-part series on financial freedom for families: Planning, Income, Debt, and You. If you haven’t read this post about getting on the same page re: finances, it’s a good foundational piece to start with. In this series, I want to take an in-depth look at how to approach finances, as a couple. I want to convey basic principles to build an understanding of how to work together to accomplish financial goals, instead of letting money be what tears you apart.

Today, let’s talk about planning.

You can talk about money until you’re blue in the face, but without consensus on a plan with actual, measurable, and attainable steps, you are just talking in circles. So what does a realistic plan look like? Well, that varies depending on your situation. 

So why do you, as a couple need a financial plan? You may be saying, we’re okay. We aren’t rich, but we are making it. We put food on the table and have a roof over our heads. Maybe you have significant debt, maybe you don’t. Maybe you have more than you need, maybe you don’t. Maybe you fight about money, maybe you don’t. Your situation does dictate what the plan is, but it doesn’t dictate the need for a plan. Whether you need to get out of debt or retire, or you want to give more to missions, you need a financial plan.

Step one is sitting down and talking about your immediate need. I’ll give some suggestions later in this series for setting long-term goals, but I think you probably know what your immediate needs with your finances are. This is a difficult step because you may be on different pages about what your needs are. The most critical part of this step is agreement. You must agree to move on and that means that both of you will probably have to compromise somewhere. You don’t have to set massive, life-long goals at this point. Let’s just have a plan for the next six months right now. What do you want to do in the next six months, even if that is survive? If you can plan six months, you can plan a lifetime.

The next step is forming a plan. Figure out how much your immediate need will cost and go from there. I recommend looking at your expenses for the last three months to get a basic, monthly cost of living, subtracting that from your current income, and then looking at what is left. That is what you have for accomplishing your immediate need. If there isn’t anything left, you have two choices: more income or fewer expenses. If neither of those are options, don’t lose heart; we’ll talk about ways to find places to cut and gain in later weeks. 

Now that you know where you are, it’s time to agree on a plan to move forward. Find areas that both of you can cut expenses and decide an amount to save toward your plan. You’ll need a budget to follow. Maybe you are more disciplined than us, but without a real budget, we rarely achieve our goals. You can see a basic outline below. I think it can apply to anyone’s household finances.

So now you have a plan! It takes time, discipline, and lots of communication, but you can execute it. Over the next few times I blog here, I’ll be going over different aspects of household finances to help you modify and execute this plan. I’m praying that you’ll find this helpful. I’m no expert, but I believe that with good communication, you can achieve your goals.

Read Part Two
Read Part Three

 ~Howell

@G2WHubs