I think we can all agree that finances play a key role in our married lives. It’s the need to provide a quality life for our family that drives most of us to work, and we know that the way we spend our resources directly affects our lifestyle now and down the road.
Money stuff is important.
That is not to say that money is the center of life or that managing the family finances must be an oppressive burden. In fact, financial success is really just a matter of making good choices consistently.
The number 1 rule is to keep it simple.
These tips aren't earth-shattering and they're not original. In fact, it is the same advice we have heard from our grandmothers our entire lives. It’s not complicated, but it's effective.
6 Tips for Simple and Successful Marital Finances
1. Build a basic budget…together
The two key components of a meaningful family budget are: (1) to proactively plan ahead for how you will spend your money and (2) to create it with your spouse.
You and your spouse must create your budget together and you must agree to follow the same budget. When you take this approach, a budget can become a surprisingly valuable tool in your marriage. Real communication is needed to formulate a plan, and real trust is developed when you both stick to it out of respect for each other.
2. Work together from a single account
Do you and your spouse operate with separate bank accounts or a “yours, mine and ours” approach to your family finances? I would strongly encourage you to consider simplifying your life by consolidating everything into a single bank account. Not only will it be easier to keep track of, but you will benefit by shifting your mindset to one of unity with your money. As a bonus, you can expect that the openness and communication required to make a single account a success will carry over and enhance other aspects of your married life.
3. Eliminate your debt (very important)
None of us enjoy paying the car finance company or student loan office each month. In fact, I think we can all agree that it sucks to have your hard earned money spoken for before you even receive your salary. So, if we all hate the payments, why do so many families have them?
It’s a matter of mindset. If you are fed up with being normal (i.e., deeply in debt), you can shed the debt and achieve financial freedom. You set the priorities, and you make the decisions that will allow you to ditch the debt. My wife and I only have a mortgage as debt - our credit cards are paid off each month and we don't borrow a single penny for expenditure, and you know what? It's absolute bliss.
4. Stick with simple (and effective) investments
As a rule, if you don’t fully understand something, you should not invest in it. If you chase the latest hot trend and buy what everyone is recommending, you are almost assuring yourself of poor returns.
Instead, take a simple approach and focus your investing in areas with a long track record of success. Personally, I think it is tough to beat a diversified mix of mutual funds for retirement investing. They are not sexy or flashy. But they are very effective, low in cost and easy to understand. That’s a formula for long-term success. There are even no fee mutual funds on the market now that have given consistent and reliable returns - but don't forget to take advantage of your Share ISA to reduce your taxes.
5. Enjoy the simple things in life. Live within your means
At the end of the day, it really does come back to living on less than you make. I hope you make a lot of money and love what you do to earn it. However, the critical point here is that you really don’t need a ton of money to be financially successful.
The key is contentment. Quit placing your value in material things and trying to maintain a high-cost lifestyle. When you learn to appreciate your family and value the simple pleasures in life, your need to impress the neighbors really does start to fade.
6. Remember to pass it on
In my opinion, the best part of simplifying your financial life and finding contentment with your lifestyle is the impact it has on your relationship with your spouse and the example it sets for your kids. When you break the cycle of debt dependence and fights about money, you set the stage for financial success for generations to come. You literally have the ability to change the future shape of your family tree.
Were these suggestions brilliant, original and completely unexpected? Of course not. I’d venture to guess that you knew these things, but you may not be living them. The key is to take action.
Simplify your financial life and invite new success with your money and, most importantly, your marriage.
If you are interested in the stock market, there isn’t a chance that you haven’t heard of Warren E. Buffet. He’s the second richest man in America with a net worth of $44 Billion - that's with a capital B!
Although very rich, Warren lives a “simple” life. He still drives himself to work every day and dines at Gorat’s, a standard, local steakhouse in Omaha. He is widely known for being courteous, personable, and humble. Obviously, Warren Buffett is a genius when it comes to investing and in life, so it pays to listen to his words. Here are ten famous Warren Buffet quotes that we can learn a ton from:
1. “Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.” Sounds pretty simple, right? But when you’re buying or selling stocks, never losing money can seem impossible because prices fluctuate all the time. Warren, though, believes in buying the value of a company and not its stock price. He buys value at the right price, he doesn’t speculate or gamble. He makes sure that he knows a company’s value and that it will far outweigh the price that he paid for, and that is how he sticks to rule No.1.
2. “You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.” Warren is a patient man. He would never chase prices or force any investment. He waits for the right moment (dictated by either price or market condition) to pounce, and pounce he will. This requires a great deal of discipline, and that is what separates him from the majority of unsuccessful investors. Indeed, patience is a virtue.
3. “Never invest in a business you can’t understand.” This Warren Buffet quote is probably an offshoot of rule No.1. He will only play a game that he is really great at to ensure that his chances of losing are slim. Understanding a business really well can help you smell trouble from miles away. Also, you can never have conviction in something you do not understand, and conviction is what enables you to pounce on a company when the time is right.
4. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Warren would always put more value in a great company with great products and management than a mediocre one that can be bought on the cheap. A company’s stock price moves with the whims and emotions of traders and speculators, and is never a good indicator of value.
5. “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” This is a great criterion in choosing a company to buy. Only buy stock in a company that will thrive, grow, and excel in the foreseeable future regardless of stock price. I only know one kind of company that fits that description, and that is the great kind.
6. “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Warren knows that the stock market is full of folly. He knows that emotions like hope, greed, and fear dictate stock prices rather than logic and value. When people are panicky or fearful (as in a bear market) he takes that chance to buy great companies at cheap prices. As long as he does his research and knows the real value behind a company, he doesn’t get scared of its price fluctuations.
7. “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.” This Warren Buffet quote shows his humility and his infinite thirst for learning and improvement. He doesn’t have a huge ego; he doesn’t think of himself as superior than anybody else out there. Nor does he think that he knows everything.
8. “Our favorite holding period is forever.” Warren plays for keeps. He doesn’t buy a company that he wouldn’t hold or manage until a very long time. Making amazing gains, like his, takes time. Start young and go for the homeruns.
9. “Only when you combine sound intellect with emotional discipline do you get rational behavior.” Investors need these two ingredients to successfully parlay the investment game. The sound intellect comes from doing your homework. It is your research and analysis of a company’s business and value. Discipline on the other hand, refers to your ability to wait for the proper price to enter. You shouldn’t chase prices in bull markets and you shouldn’t get scared in bears. Practice emotional discipline and take your investing to the next level.
10. “Without passion, you don’t have energy. Without energy, you have nothing.” Be passionate in what you do and do what you are passionate about. Passion will make you go to the ends of the earth to see a dream fulfilled. It will be your fuel in your journey. It will make you unstoppable. It will see you through when times get tough, and it will make life so worth living.
Took onboard these inspirational, time-tested and proven quote and they'll help both in life and in investing.
