Hours of dedicated learning, training, and mentorship are required to move from amateur to expert. But who has the time for that? Most of us are still figuring out our careers or how to be a better parent or partner. With our busy lives, acquiring an additional skill—no matter how beneficial or fulfilling it may be—can seem like a fantasy.
It turns out that there are some simple steps you can take to jumpstart your learning process. Here are some tips for quick skill acquisition!
Skills are typically composed of smaller processes. For instance, playing a song on piano requires a few different abilities. You must be able to move each finger to the right keys at the right time, you should probably know how to read music, and possess a sense of when to play more loudly or softly. Trying to play a song without some command of those capabilities can feel overwhelming or impossible!
That’s why it’s useful to start with the end product and work backwards to discover the little skills you need to master. Once you see the micro-processes involved, you can start working forward. This might feel silly at first. Jumping between the same few notes over and over again until you’ve got them down isn’t the most glamorous endeavor! But it lays the foundation for a more complicated and satisfying skill that will pay off in the long run.
It’s easy to think making progress will be a straight line. We’re building up our little skills, getting better and better with each practice session. But pretty soon we hit a wall. There’s a problem that seems we can’t overcome. We might even start backsliding or feeling like we’re getting worse!
Don’t sweat a roadblock. It’s perfectly normal to hit a plateau when you’re trying to acquire a skill. Take a break from practice, go for a walk or take a nap, and get back to it with a fresh perspective. You might be surprised by how much learning occurs when you allow your brain to relax and process.
As nice as it sounds, multitasking simply does not work. There’s overwhelming evidence that it actually slows down your brain and wildly reduces efficiency.¹ Multitasking must be avoided at all costs when you’re trying to quickly learn a new skill. Try setting aside some undistracted time every morning or evening for a few weeks to work on your skill. That means leaving your phone in another room, turning off the TV, and telling your family that you’ll be busy for a while. Get in the zone and start practicing!
An hour every evening for a month won’t transform you into a Picasso. You’re not shooting to be a virtuoso. Instead, these tips and strategies may help you quickly acquire competence in just about anything you set your mind to. So draw up a list of some skills you want to develop and start learning!
¹ “Multitasking is dead. Monotasking is better for our health, relationships and productivity,” Wendy Rose Gould, Today, May 13, 2022, https://www.today.com/health/mind-body/multitasking-bad-productivity-monotasking-rcna26968
Almost no one will tell you that you should care what others think. Instead, you hear platitudes like “marching to the beat of your own drum”, or “just do you.”
You might even hear something counterintuitive like, “People will like you more if you don’t care about their opinions.”
What? You should stop caring about what others think so they’ll like you more? It’s a bald-faced contradiction at best, deceptively manipulative at worst.
The simple fact is that, unless you’re a diagnosed psychopath, you’ll care what others think about you. And that’s a good thing. It can stop you from alienating people in your life with bizarre decisions or unnecessary antagonism.
But is there such a thing as an unhealthy obsession with the opinions of others? Yes! Analysis paralysis, social anxiety, and unmeasured decisions can all result.
But that shouldn’t lead to a fluffy kitchen countertop quote about “one’s own sweet way.”
Instead of jettisoning all your social concerns, try this—prioritize your values over all.
Let’s say that one of your values is maintaining healthy relationships. That requires care about what someone else thinks of you—without their love and respect, the relationship is doomed to fail.
But you may discover other values, like protecting the well-being of the ones you love. That might mean making hard decisions that, in the short-term, lower the opinions of others.
This isn’t just advice for your personal life—it can benefit your career as well.
For instance, if you’re an employee, you should care about your boss’s opinion of you. That doesn’t mean being a doormat or suck-up. It simply means that you would do well to pay attention to their instruction, make sure you’re on top of things, and show them you’re honest, responsible, and a hard worker. This may lead to a promotion, a raise, and being known as a reliable team member.
The same is true for entrepreneurs. It’s hard to land and keep clients if you’re oblivious to their feelings toward you.
That’s not an excuse for tolerating mistreatment by customers, which is common among new entrepreneurs. Instead, it’s a call to know your own worth, to discover what you value, and then actually serve your clients.
The takeaway? “Don’t care about what others think” is short-sighted, selfish advice.
Instead, explore your values. Discover what matters most. And build your life around those principles. They’ll bring far greater cohesion—and happiness—than ignoring other people and running head-long into the void.
That’s the question that divides intrinsic motivation from extrinsic motivation. And learning the difference could salvage your career from disaster.
Why? Because different motivation types are useful in different circumstances.
Intrinsic motivation is process focused. It comes from the sense of satisfaction from a job well done. It’s why you keep coming back to hobbies you love, or why you’re compelled to work on that project even when it’s not required. You do it for the love of the game.
Extrinsic motivation is reward focused. It comes from the anticipation or acquisition of something tangible, like a trophy, a raise, praise, or a bonus. It’s the reason you put up with a high paying job you hate, or why you grind out those extra reps at the gym. You do it for the payoff.
Intrinsic motivation is internal, while extrinsic motivation is external.
Here’s the strategic difference—intrinsic motivation is powerful long-term, extrinsic motivation is powerful short-term.
Think about it. How long can you really tolerate that awful job? Eventually, it’ll wear you down, no matter the pay. It will tax your mental health, your relationships, and your quality of life. Trying to leverage reward motivation over the long-term is a recipe for burnout.
That being said, it’s excellent if you need a burst of energy. “Just a few more months, and then I’ll be debt free. I can make it.” Extrinsic motivation is often what we rely on to push through short-term challenges.
By contrast, intrinsic motivation can provide powerful groundwork for planning long-term goals. What are the hobbies and activities you find inherently rewarding? Are they career oriented? Family focused? That’s where you should focus your long-term energy.
It will test your talents, your mental toughness, and your ability to adapt. And those tests—if you pass them—can spark extraordinary growth.
Here are four ways entrepreneurship will change you.
You’ll develop self reliance. Entrepreneurs need to learn to solve their own problems, or fail. They don’t have a team to handle the daily grind of running a business.
Instead, new entrepreneurs handle everything from product development to accounting. It’s a stressful and high stakes juggling game.
But it can teach you a critical lesson: You’re far more resourceful than you thought. You’ll learn to stop waiting for help and start looking for solutions.
You’ll discover loyal friends. One of the downsides of entrepreneurship is that it may expose toxic people in your circle. They’re the ones who might…
As you and your business grow, you may need to limit your interactions with them. They might be too draining on your emotional resources to justify long-term relationships.
Rather, your circle should reflect values like positivity, encouragement, and inspiration. Those new friends will support you through the highs and lows of entrepreneurship.
You’ll learn how to manage stress. Late nights, hard deadlines, and high stakes are the realities for entrepreneurs.
To cope, you must build a toolkit of skills that can carry you through the hardest times. Otherwise, you may crack under the pressure and lose any progress you’ve made.
It comes down to one key question: Why do you want to be an entrepreneur?
Are you driven by insecurity? Or by vision?
If you’re trying to prove a point to yourself or others with your business, you may fall apart at the first hint of failure.
If you’re driven by vision, you’ll see failure as part of the process.
Examine your motivations. Over time, you’ll grow more aware of your insecurities. Talk about them with your friends, families, and mentors. As you bring them into the light, you may find they have less and less power.
Entrepreneurship can spark an explosion of professional personal growth. You’ll grow up. You may start with an employee mindset, but you’ll mature into a leader. That’s how entrepreneurship will change you.
P.S. If this seems daunting, start with a side hustle. It can ease you into the role of entrepreneurship without throwing you into the deep end too soon!
If you’re a parent, you have the power to influence your kids more than anyone or anything else. Your child’s response to conflict, their career, their relationships, their hobbies, their values, their politics, the core of who they are can all be shaped by you, the parent.
The same is true of your mindset towards money. The way you deal with your finances can have a profound impact on how your children deal with theirs.
Research has shown that most people start learning about money by age 3. By age 7, their attitudes about money are set.¹
What do you remember between ages 3 and 7? Probably very little on the conscious level. But you may carry some of their habits around with you…
You probably remember if your parents had frugal or flippant attitudes about money.
You probably remember if your parents fought about money.
You probably remember trying to persuade your parents to buy you things… or if your words fell on deaf ears.
On some level, you probably feel all those things now when money comes up in conversation. When your stress vanishes after buying a new toy. Or your heart sinks when you check your bank account. Or you get a head rush of discomfort when your coworker starts talking about the size of their investment portfolio.
Here’s another fact—almost no one is happy with the financial education they got growing up. 83% of parents wish they had learned more about money when they were kids.²They’re eager to avoid mistakes from their own childhood. But there’s just one problem…
Do they actually know how money works?
It’s unlikely. A 2020 global survey revealed that only 15% of young adults were financially literate.1 Translation—85% of adults, through no fault of their own, are poised to repeat their own parents’ mistakes.
That’s why reaching families with financial education is foundational to our mission. If parents get a financial education, their children are far better positioned to build wealth. And if families can learn how money works together, they can remove emotional obstacles and grow closer together, as well.
That’s why financial education is central to my mission. Because once families know how money works, they’re far less likely to be taken advantage of. They start making decisions that favor their futures, not someone else’s.
And when that happens to enough families, the financial industry will never be the same.
Well, not exactly. But money CAN help remove stressors that impact your happiness.
A new study by Penn State University revealed that happiness increases with income. On the surface, that may appear obvious.
But in fact, people who equated their self-worth with money were LESS satisfied with their lives.
So it’s not the money itself that brings happiness.
Instead, money can provide security and freedom. It helps eliminate the fear of going without, and opens up choices for how to live your life.
Think of it as a foundation for investing in the things that matter most, like…
- Your relationships - Your career - Your life mission
If you only take one thing away from this article, let it be this…
Money itself isn’t the goal. It’s a tool to help you achieve your goals.
So keep your eyes on what matters most, like your family and mission. Then, take an inventory of ways money can help you safeguard and pursue the things you value. That’s how money can help you “buy” happiness.
Well, maybe a brand new sports car or free ice cream for life. But even a state-of-the-art fully-decked-out sports car will eventually need routine maintenance, and the taste of mint chocolate chip can get old after a while.
The same kinds of things can happen when you start your own business. There are many details to consider and seemingly endless tasks to keep organized after the initial excitement of being your own boss and keeping your own hours has faded. Circumstances are bound to arise that no one ever prepared you for!
Although this list is not exhaustive, here are 5 things to get you started when creating a business of your own:
1. Startup cost
The startup cost of your business depends heavily on the type of business you want to have. To estimate the startup cost, make a list of anything and everything you’ll need to finance in the first 6 months. Then take each expense and ask:
Once you’ve determined the frequency and necessity of each cost for the first 6 months, add it all together. Then you’ll have a ballpark idea of what your startup costs might be.
(Hint: Don’t forget to add a line item for those unplanned, miscellaneous expenses!)
“Find a need, and fill it” is general advice for starting a successful business. But if the need is apparent, how many other businesses will be going after the same space to fill? And how do you create a business that can compete? After all, keeping your doors open and your business frequented is priority #1.
The simplest and most effective solution? Be great at what you do. Take the time to learn your business and the need you’re trying to fill – inside and out. Take a step back and think like a customer. Try to imagine how your competitors are failing at meeting customers’ needs. What can you do to solve those issues? Overcoming these hurdles can’t guarantee that your doors will stay open, but your knowledge, talent, and work ethic can set you apart from competitors from the start. This is what builds life-long relationships with customers – the kind of customers that will follow you wherever your business goes.
(Hint: The cost of your product or service should not be the main differentiator from your competition.)
3. Customer acquisition
The key to acquiring customers goes back to the need you’re trying to fill by running your business. If the demand for your product is high, customer acquisition may be easier. And there are always methods to bring in more. First and foremost, be aware of your brand and what your business offers. This will make identifying your target audience more accurate. Then market to them with a varied strategy on multiple fronts: content, email, and social media; search engine optimization; effective copywriting; and the use of analytics.
(Hint: The amount of money you spend on marketing – e.g., Google & Facebook ads – is not as important as who you are targeting.)
4. Building product inventory
This step points directly back to your startup cost. At the beginning, do as much research as you can, then stock your literal (or virtual) shelves with a bit of everything feasible you think your target audience may want or need. Track which products (or services) customers are gravitating towards – what items in your inventory disappear the most quickly? What services in your repertoire are the most requested? After a few weeks or months you’ll have real data to analyse. Then always keep the bestsellers on hand, followed closely by seasonal offerings. And don’t forget to consider making a couple of out-of-the-ordinary offerings available, just in case. Don’t underestimate the power of trying new things from time to time; you never know what could turn into a success!
(Hint: Try to let go of what your favorite items or services might be, if customers are not biting.)
5. Compliance with legal standards
Depending on what type of business you’re in, there may be standards and regulations that you must adhere to. For example, hiring employees falls under the jurisdiction of the Department of Labor and Federal Employment Laws. There are also State Labor Laws to consider.
(Hint: Be absolutely sure to do your research on the legal matters that can arise when beginning your own business. Not many judges are very accepting of “But, Your Honor, I didn’t know that was illegal!”)
Starting your own business is not an impossible task, especially when you’re prepared. And what makes preparing yourself even easier is becoming your own boss with an established company like WealthWave.
The need for financial professionals exists – everyone needs to know how money works, and many people need help in pursuing financial independence. WealthWave works with well-known and respected companies to provide a broad range of products for our customers. We take pride in equipping families with products that meet their financial needs.
Anytime you’re ready, I’d be happy to share my experience with you – as well as many other things to consider – when becoming an associate with WealthWave.
Excited? Afraid? Disappointed? Nothing?
Those feelings can reveal deeper truths about your relationship with money. And that relationship can influence your financial future.
That’s because, despite what people say, money is often wrapped up in feelings about…
That’s why people’s behavior with money is often not well-reasoned. Instead of making measured decisions based on the numbers, people find themselves on autopilot. In other words, they react instead of respond.
Let’s look at some examples…
Let’s say your relationship with money is primarily fear based. Maybe you saw your parents struggle with their finances, and you constantly worry about reliving their experience.
The autopilot response? Frugality and risk-aversion, even if you earn a comfortable wage.
There’s nothing wrong with either of those qualities in moderation. But taken too far, they may seriously damage your personal relationships and prevent you from taking advantage of financial opportunities.
Plus, the constant stress and fear of losing everything might impact your mental and physical health if not properly managed.
There’s also the opposite extreme. What if you use wealth to establish your social status?
You’ll be far more likely to buy things you don’t need to show off to your peers. You may even begin compulsively shopping to cope with stress.
In other words, you may be using money in unhealthy and damaging ways. And the stress and guilt that come from such behavior can seriously harm relationships and your ability to accomplish your goals.
So what’s the solution? What should your feelings toward wealth be?
The starting point must be that money is primarily a tool. It doesn’t define you. It isn’t evil. It’s simply a tool that empowers you to pursue things that you love.
Simply put, money isn’t an end unto itself. It’s a means to an end.
The question is, then what do you love? What do you want to do and see and pursue? And what role will money play in achieving those goals?
Once you reorder your relationship with wealth along those lines, a whole world of possibility may open up like…
But it all starts with understanding your current feelings towards money, and then deciding on what you want your future to look like.
If you need someone to process those feelings with, contact me! I’m here to offer you guidance and support on your journey towards financial stability.
Having one doesn’t mean you’ll necessarily have the other. But if you want to have both, there’s strong evidence that healthy relationships can be a key investment in your earning potential AND happiness.
A Harvard study followed 100 graduates through their adult lives. The results were profound—those with strong relationships earned far more than their peers.2 In fact, there was a deeper connection between love and income than intelligence and income.
The takeaway? One of the greatest investments you can make is in the people around you. Screening out negative influences and creating warm, loving relationships can profoundly transform your potential. Don’t ignore what matters most in the name of your career or success.
That’s easier said than done. Few are ever taught what it takes to build healthy relationships, how to identify negativity in friends, or what toxic people look like.
Everyone’s situation and knowledge level is different. But for most, it’s wise to seek out a mentor. Who is someone you know who’s built happy, prosperous relationships with their family and friends? Talk to that person! Study how they see the world, how they process information, and handle conflict. It might just change your perspective and the course of your life.
¹ “What is the secret to a long and happy life? Not money, but relationships,” Claire Badenhorst, Biznews, Jun 22, 2021, https://www.biznews.com/sponsored/2021/06/22/happy-life-relationships
The good news is, you don’t need a perfect relationship or perfect finances to have productive conversations with your partner about money, so here are some tips for handling those tricky conversations like a pro!
Be respectful. Respect should be the basis for any conversation with your significant other, but especially when dealing with potentially touchy issues like money. Be mindful to keep your tone neutral and try not to heap blame on your partner for any issues. Remember that you’re here to solve problems together.
Take responsibility. It’s perfectly normal if one person in a couple handles the finances more than the other. Just be sure to take responsibility for the decisions that you make and remember that it affects both people. You might want to establish a monthly money meeting to make sure you’re both on the same page and in the loop. Hint: Make it fun! Maybe order in, or enjoy a steak dinner while you chat.
Take a team approach. Instead of saying to your partner, “you need to do this or that,” try to frame things in a way that lets your partner know you see yourself on the same team as they are. Saying “we need to take a look at our combined spending habits” will probably be better received than “you need to stop spending so much money.”
Be positive. It can be tempting to feel defeated and hopeless that things will never get better if you’re trying to move a mountain. But this kind of thinking can be contagious and negativity may further poison your finances and your relationship. Try to focus on what you can both do to make things better and what small steps to take to get where you want to be, rather than focusing on past mistakes and problems.
Don’t ignore the negative. It’s important to stay positive, but it’s also important to face and conquer the specific problems. It gives you and your partner focused issues to work on and will help you make a game plan. Speaking of which…
Set common goals, and work toward them together. Whether it’s saving for a big vacation, your child’s college fund, getting out of debt, or making a big purchase like a car, money management and budgeting may be easier if you are both working toward a common purpose with a shared reward. Figure out your shared goals and then make a plan to accomplish them!
Accept that your partner may have a different background and approach to money. We all have our strengths, weaknesses, and different perspectives. Just because yours differs from your partner’s doesn’t mean either of you are wrong. Chances are you make allowances and balance each other out in other areas of your relationship, and you can do the same with money if you try to see things from your partner’s point of view.
Discussing and managing your finances together can be a great opportunity for growth in a relationship. Go into it with a positive attitude, respect for your partner, and a sense of your common values and priorities. Having an open, honest, and trust-based approach to money in a relationship may be challenging, but it is definitely worth it.
Why? Because trust and communication form the bedrock of healthy relationships. Keeping secrets of any type and size can shatter faith in your partner. It’s especially true of financial decisions—finding out your spouse has been spending money “behind your back” can cause a rift that may be difficult to repair.
To help avoid trouble and misunderstandings, make it a practice to regularly discuss the family finances with your partner. Set a weekly time to grab coffee and review your budget, your goals, and any changes you need to make moving forward.
It may feel awkward at first. You may learn there are surprise expenses that your partner hasn’t shared until now. That’s perfectly normal! Be sure to create an atmosphere of trust and openness that makes your partner feel comfortable sharing. If they reveal a spending secret, don’t lose your temper. Thank them for their honesty and then work towards a solution for the future!
Once you’ve learned how to navigate open and honest financial conversations, apply your new conversation skills to other topics in your relationship. You might just find that your relationship drastically improves!
By now, you’ve probably noticed that there’s a lot that goes into caring for your newest family member. Between the diaper changes, sleepless nights, and feedings, take a few moments to make these critical financial moves. They may bring you the peace of mind and financial security your family needs!
Add your child to your health insurance coverage. Once your child is born, you have between 30 and 60 days to enroll your newborn in your health insurance plan.¹ Fortunately, it’s not a difficult task. Have your child’s birth certificate and social security number handy, and then call your health insurance provider. Share the good news that you’ve had a child and would like to add them to your plan. If your health insurance plan is through work, you’ll need to contact your HR department and go through the same process.
Find the right childcare for your family. Childcare can be pricey, ranging from $9,100 to $9,600 annually.² If both you and your spouse work, you’ll need to find a way to budget in this significant expense.
Review the costs of local daycare centers. Nannies are worth investigating, but can be more expensive than other forms of childcare. Consider asking your stay-at-home friends or family if they can tend to your children while you’re away from home. You might land a sweetheart deal that builds relationships and saves you money!
Protect your family with life insurance. There is no better time to consider life insurance than after the birth of your child. Raising a kid is expensive! Food, education, and clothing can require significant financial resources. The right life insurance policy can protect your family’s financial stability even if you pass away or if you get sick or injured and can no longer earn an income. Now’s the time to provide the financial security that your loved ones may need in the future.
The first few months of a baby’s life are crazy—they depend on you for everything! Just be sure to take some time between caring for their physical and developmental needs to tend to your financial concerns. It’s one of the greatest services you can offer them!
¹ “How do I sign my new baby up for health insurance?,” Nikki Davis, Bernard Benefits, Sept 2, 2020, https://blog.bernardbenefits.com/how-do-i-sign-my-new-baby-up-for-health-insurance
² “Child Care Costs by State 2020,” Procare Solutions, Jun 24, 2020, https://www.procaresoftware.com/child-care-costs-by-state-2020/
“No” is a common answer to that question, often with serious consequences. One study found that financial disagreements were the leading predictor of divorce.¹
And they seem hard to fix. A research paper published on the National Center for Biotechnology Information, U.S. National Library of Medicine website proposes that “compared to non-money issues, marital conflicts about money were more pervasive, problematic, and recurrent, and remained unresolved, despite including more attempts at problem solving.”²
Fortunately, creating financial unity with your partner is possible. Here are some ideas to bridge the gap with your partner and start working with your money as a team.
Know thyself (and thy partner). What would you do if you stumbled upon $1 million? Your answer will help you discover your financial values. For instance, if you would use your new-found cash to create your dream business, you might be a natural investor.
But here are two bigger questions: Do you know your partner’s financial values? And how do they align with yours?
The only way to answer those questions is to start conversations with your partner about money. Ask them how finances were handled in their home growing up and what they want money to do for them. Then, look for a middle ground and develop a set of goals you can work towards together.
Discover how money works together. Those first awkward conversations might reveal an uncomfortable truth––if either one of you has any clue what you’re doing with your finances! Ignorance about how money works is the farthest thing from bliss in a relationship. Without knowledge, it’s impossible to set realistic goals and achieve them. You’ll both find yourselves wasting money on what makes you happy in the moment and delaying achieving your goals.
But when you discover how money works as a couple, two magical things happen.
First, you get a sense of what you can accomplish as a team. Suddenly, there’s a vision for your future together that you can work towards.
Second, you notice that you’re communicating more. You swap knowledge, insight, hopes and dreams with each other. You talk about your ideal life together and how to achieve it. That alone is a game-changer for any relationship!
Meet with a professional. It’s impossible to overemphasize the importance of working on your relationship and your finances with professionals. Communicating your feelings and having productive conversations isn’t always easy! A professional counselor can give you and your partner the emotional tools you need to transform constant conflict into cooperative problem solving.
Once you have communication squared away, meet with a licensed and certified financial professional. They’ll provide guidance and insights that can help you make decisions with your money. You might be surprised by the level of peace that appears in your relationship once the stress of your finances is alleviated!
While these steps appear easy on paper, in practice they might push you outside your comfort zone. That’s a good thing! Working together as a couple to create financial unity has the potential to grow you as a person and deepen your relationship with your partner. Start having conversations about your financial values and see where your path leads you!
¹ “This common behavior is the No. 1 predictor of whether you’ll get divorced,” Catey Hill, MarketWatch Jan 10, 2018, https://www.marketwatch.com/story/this-common-behavior-is-the-no-1-predictor-of-whether-youll-get-divorced-2018-01-10#:~:text=Smart%20money%20says%20this%20argument%20could%20lead%20to%20divorce.&text=%E2%80%9CFinancial%20disagreements%20did%20predict%20divorce,together%2C%E2%80%9D%20the%20authors%20concluded
² “For Richer, for Poorer: Money as a Topic of Marital Conflict in the Home,” Lauren M. Papp, E. Mark Cummings, and Marcie C. Goeke-Morey, NCBI, Dec 6, 2011, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3230928/
Different spending habits and conflicting money management values are sometimes sources of tension between partners. Finances are the number one cause of arguments within relationships. In fact, it’s one of the most common reasons for divorce.
With bills to pay, emergency expenses, and a child’s college tuition and retirement on the horizon, many couples find their finances are stretched as they seek solutions to cover the cost of everyday life. The following 5 tips may help you and your spouse gain control of your finances.
1. Set Goals. The goal-setting phase allows a couple to talk openly about their financial history, current obligations, and future objectives. Gauging your spouse’s retirement preferences can often be a challenging obstacle before establishing a financial strategy.
2. Identify Risky Spending Overspending and making frivolous purchases may damage your financial future. Discussing mistakes respectfully on both sides of the relationship can help prevent poor decisions in the future. If an expense proves to be a blunder, own up to the fact and move on.
Review the household “record of accounts” (that is, your budget) and your current financial landscape before adjusting your strategy. This may help protect your family from further problems that might delay the timeframe you want to retire.
3. Pay off Bills Be fair. If—or when—your spouse admits to overspending, try not to blow up. We live in a consumerist society designed to push our buttons and trick us into spending. Even worse, it’s a pattern that can be difficult to break because it’s a very socially acceptable addiction.
Instead of exploding, ask them open-ended questions about their spending habits. The key here is working towards a compromise in a way that doesn’t villainize your partner but also protects your financial future together.
4. Periodic Review. Due to the dynamics of financial decision-making between spouses, it’s clear that periodic review has a benefit. Changes in income, lifestyle, and family or business obligations can alter a couple’s financial goals for retirement. Try to meet at least once a month (maybe over a cup of coffee) to review your finances and update your budget.
5. Don’t forget to have some fun! The goal of getting in control of your finances is not to make life miserable. Sure, you might need to cut back on frivolous spending in the present to have more in the future, but that doesn’t mean you can’t enjoy life. Set aside a little each month for a movie night or dinner with friends. You actually might discover that things like budgeting free up cash!
Building a financially sound relationship takes time. It takes a willingness to listen, to compromise, to take responsibility, and to prepare. Sometimes it might take some experience as well. Contact a qualified and licensed financial professional to help you and your loved one come up with a strategy to build your future together.
Nearly every choice you make precludes something else that might have been.
Opportunity cost exists in everything from relationships to finances to career choices, but here we’ll focus on that last one. Over a lifetime, the cost of career decisions can be massive.
For opportunity costs that can be measured, usually in dollars, there’s even a math equation.
What I sacrifice / What I gain = Opportunity cost[i]
Let’s say you have two career choices. One is to work as a mechanic at $50 per hour and the other is to work as a karate instructor at $20 per hour.
Opportunity A / Opportunity B = Opportunity cost
Here it is with numbers: $50 / $20 = $2.50
To translate that, for every $1 you earn as a karate instructor, you could have earned $2.50 as a mechanic. The ratio remains the same whether it’s for one hour worked or 1,000 hours worked because it’s based on earnings per hour.
Adding a time element
We can only work a certain number of hours in a week and we can only work for a certain number of years in a lifetime. Adding time into the discussion doesn’t change the math relationship between the opportunities but it does recognize real-world constraints. Sometimes these limits are by choice. You could be both a full-time mechanic and a full-time karate instructor, but most people don’t want to work 80 hours per week. Something has to give, and that’s where considering opportunity cost comes in.
If you only want to work 40 hours in a week, you’ll have to choose one career over the other or split your time between the two. But even in splitting your time, there is an opportunity cost. Think about it like this: Every hour spent in a lower paying job costs money if you had an opportunity to earn more doing something else.
The bigger picture
In our example using the mechanic vs. the karate instructor, the difference in annual income is over $60,000 per year ($104,000 minus $41,600). Over a 40-year working career, the difference in earnings is nearly $2.5 million, and it all happened one hour at a time.
Your career choice shouldn’t just be about money – you should do something you enjoy and that gives you satisfaction. There may be several other considerations as well – like opportunity to travel, the kind of people you work with, and the greater contribution you can make to the world. However, if there are two choices that meet all your criteria but one pays a bit more, just do the math!
In fact, money matters are the leading cause of arguments in modern relationships.* The age-old adage that love trumps wealth may be true, but if money is tight or if a couple isn’t meeting their financial goals, there could be some unpleasant conversations (er, arguments) on the bumpy road to bliss with your partner or spouse.
These tips may help make the road to happiness a little easier.
1. Set a goal for debt-free living.
Certain types of debt can be difficult to avoid, such as mortgages or car payments, but other types of debt, like credit cards in particular, can grow like the proverbial snowball rolling down a hill. Credit card debt often comes about because of overspending or because insufficient savings forced the use of credit for an unexpected situation. Either way, you’ll have to get to the root of the cause or the snowball might get bigger. Starting an emergency fund or reigning in unnecessary spending – or both – can help get credit card balances under control so you can get them paid off.
2. Talk about money matters.
Having a conversation with your partner about money is probably not at the top of your list of fun-things-I-look-forward-to. This might cause many couples to put it off until the “right time”. If something is less than ideal in the way your finances are structured, not talking about it won’t make the problem go away. Instead, frustrations over money can fester, possibly turning a small issue into a larger problem. Discussing your thoughts and concerns about money with your partner regularly (and respectfully) is key to reaching an understanding of each other’s goals and priorities, and then melding them together for your goals as a couple.
3. Consider separate accounts with one joint account.
As a couple, most of your financial obligations will be faced together, including housing costs, monthly utilities and food expenses, and often auto expenses. In most households, these items ideally should be paid out of a joint account. But let’s face it, it’s no fun to have to ask permission or worry about what your partner thinks every time you buy a specialty coffee or want that new pair of shoes you’ve been eyeing. In addition to your main joint account, having separate accounts for each of you may help you maintain some independence and autonomy in regard to personal spending.
With these tips in mind, here’s to a little less stress so you can put your attention on other “couplehood” concerns… Like where you two are heading for dinner tonight – the usual hangout (which is always good), or that brand new place that just opened downtown? (Hint: This is a little bit of a trick question. The answer is – whichever place fits into the budget that you two have already decided on, together!)
Huckabee, Tyler. “Why Do People In Relationships Fight About Money So Much?” Relevant, 1.3.2018, https://bit.ly/2xiflG9.
It seems like that candy bar in the check-out lane has doubled in price without doubling in size. Unlike the value of stocks, real estate, or similar assets, candy doesn’t appreciate in value. What has happened is that your money has depreciated in value. Inflation has a sneaky way of eating away our money over time, forcing us to either find a way to earn more – or to get by with less. Even for the youngest of Generation Z, now in their early teens, consumer prices have increased about 30% since they were born.[i]
In 2018, the average new car costs $35,285 – up $703 since the previous year, or about 2%.[ii] While a $703 increase in a single year might seem high, the inflation rate (as a percentage) is lower than for many other items. And some other items may not have gone up as much as you would expect. For example, in 1913, a gallon of milk cost about 36 cents. One hundred years later in 2013, the average cost was about $3.53.[iii] But if milk had followed the average rate of inflation, the price for a gallon would be nearly $10.00 by now. Supply, demand, and more efficient production and distribution all contribute to a lower price than expected with the milk example. The U.S. government uses what is called a Consumer Price Index (CPI) to measure inflation, which unfortunately does not include food and fuel – both essentials and daily expenses for households – making the true rate of inflation more difficult to determine.
Inflation is due to several reasons, all with complex relationships to each other. At the heart of the matter is money supply. If there is more money in circulation, prices go up. Under the current monetary system, which utilizes a Central Bank to govern monetary policy, inflation rates have been as low as about 1.3% annually in 1964 to 13.5% in 1980.[iv] That means something that cost $10 in 1979 cost $11.35 just a year later. That may not seem like a big increase on $10, but if you’re like most people, your pay probably doesn’t go up 13.5% in a year for doing the same work!
How does inflation affect my savings strategy? It’s a good idea to always keep the current rate of inflation in the back of your mind. As of August, 2018, it was about 2.7%.[v] Interest rates paid by banks and CDs are usually lower than the inflation rate, which might mean you’ll lose money if you leave most of it in these types of accounts. Saving, of course, is essential – but try to find accounts for your cash that work a bit harder to outrun inflation.
[i] https://www.bls.gov/data/inflation_calculator.htm\ [ii] https://mediaroom.kbb.com/average-new-car-prices-jump-2-percent-march-2018-suv-sales-strength-according-to-kelley-blue-book\ [iii] https://inflationdata.com/articles/2013/03/21/food-price-inflation-1913/\ [iv] & [v] https://www.usinflationcalculator.com/inflation/historical-inflation-rates/