Personal Principles and Goals

This is the second exercise in a series designed to walk you through an entire financial plan.  The exercise is embedded in an Excel spreadsheet you can download and save for personal use.  You can find the backdrop for the exercise HERE or just jump right in with the instructions given below:

Deliberate over that which you want to mark your life.  Write down a word or phrase that will be your Personal Principle—your value—and then give a sentence or two of explanation.  These are yours, but I encourage you to share them with a good friend and your spouse, if applicable.  (One of the nuanced difficulties and benefits of marriage is the necessity of allowing your Personal Principles to be folded into those of your spouse.  If your spouse is a willing participant, encourage him or her to complete this exercise as well to develop a set of Unifying Principles for your family.)

You might benefit from reviewing Ben Franklin’s list of personal principles—his “Thirteen Virtues.”  The goal is not to make Franklin’s your own, but to be informed by his intellect, entertained by his wit and inspired by his wisdom:

Your GOALS—especially your financial goals—may be better informed when you complete this entire process, but practice now writing down a few goals that meet the specific, measurable, attainable, and meaningful criteria, then come back to them after completing the full plan series.  Financial goals will then be broken down into specific steps to meet those goals in your Action Plan in the final step.

Repetition Helps and Hurts

By Jim Stovall

The tasks we repeat are the tasks we master.  The thoughts we review are the thoughts we remember.  Practice doesn’t make perfect.  Practice makes consistent.  Only perfect practice will make a perfect performance.

I have spoken in many arena events with thousands of people in attendance.  It is interesting to observe when the event organizers conduct a brief experiment.  An announcer will get onstage and quote the first half of an advertising slogan that hasn’t been used in decades.  Without hesitation, thousands of people in unison will recite the second half of that obsolete and outdated slogan.

Cigarettes have not been advertised on broadcast TV or radio since the 1960s; however, when the announcer at the arena event says, “Winston tastes good…”, the entire audience recites, “…like a cigarette should.”  While I’m glad that cigarette advertising has been outlawed, and future generations won’t be exposed to that harmful habit in the same way many of us were, it is important to realize that the slogan has been deposited into our collective consciousness in a way that it can be recalled by the masses instantly.

It’s not memorable because we care about cigarettes or like the ad that ran years ago.  It’s memorable because the message was repeated countless times.

I’ve heard the same announcer simply mention the first ingredient listed in a McDonald’s commercial by saying, “Two all-beef patties….”  Without hesitation, 10,000 people recite in unison, “special sauce, lettuce, cheese, pickles, onions, on a sesame seed bun.”

You may not like Big Macs and may not have had one in years.  That particular ad hasn’t run on TV or radio in several decades, but because of the repetitive nature of the advertising campaign, we all know it immediately.

While repetition in delivering your message is important, there is a type of repetition in the digital age that is counterproductive.  If I receive one email from a person or organization, I’m likely to give it some of my attention.  If I receive two or three of them, I instantly know it is part of a bulk email blast, and I don’t have to pay attention to it.  If I get an envelope in my mailbox addressed to me with some type of offer or incentive, I may review it for a moment; but if I get two or three duplicates of the same mailing in my box at the same time, I realize it’s only a mass mailing, and I don’t have to pay attention to it.

If you’re going to use the power of repetition, use it in a way that benefits your message, not in a way your message becomes marginalized.

As you go through your day today, remember:  Repetition can make you memorable or annoying in the eyes of those you want to reach.

Today’s the day!

The Real Point Of Financial Planning

Whether you’re a do-it-yourself-er or working with a professional financial planner, the real point of financial planning is often obscured in a process so deep and wide that it’s easy to get lost.  The most prominent mistake in financial planning is to allow the process to be reduced to an exercise in which success is solely derived from a single number—your net worth, today and projected into the future.  In truth, the real point of good financial planning isn’t to have more money, but a better life.

One may argue this point suggesting that more money is simply more…better, that few financial plans have suffered from a surplus of financial resources.  This is true at a moment in time, but the problem with making “the number” the ultimate goal of a financial plan is that it steers behavior to get there.  But that is the point, many of my esteemed colleagues may insist, that we subordinate our todays to our tomorrows in hopes of securing comfort and prosperity in both.  Then I ask you this:

Is comfort and prosperity the chief end of life?

I’m privileged to teach the Fundamentals of Financial Planning at my alma mater, Towson University, and every semester I pepper the class on the first day with a barrage of questions, among them, “How many of you are HERE because you WANT to be here?”  The average positive response is 10% of the class.  Most of them are accounting majors, so I engage them in discussion to determine WHY they chose that course of study.  The primary reason given is to secure comfort and financial prosperity in life.

“So you’ve chosen,” I ask, “to dedicate four-to-six years of your life becoming educated sufficiently to spend the bulk of your waking adult hours thereafter in a job you don’t particularly love to hopefully secure financial prosperity?”

Unfortunately, too many financial planning processes look just like this.  They begin with numbers and back into the actions—and life—necessary to achieve those numbers.  Planners may justify this by disclaiming that the client dictated the data (in the questionnaire designed to force the client into a box that can be managed by the planning software du jour).  The recommendation is simply the output.  But that’s because the process is backward.

It should start, instead, with three simple questions:

  1. WHO are you?
  2. WHAT do you want to be about?
  3. And, WHY?

Then and only then should the numbers come into play.  And the numbers shouldn’t exist to extinguish the who, what and why, but to support them.  If I’m really a good teacher, I may have to recommend you consider an alternative educational or vocational path.  If I’m really a good planner, I may have to recommend a course of action that could have a negative impact on your bottom line—today and in the future—but which leads to a better, more fulfilling life.

At best, the benefit of financial planning is minimized when reduced solely to a process intended to give you more money, today and in the future.  At the very worst, such a process could temporarily or permanently derail your entire plan for life.

Your financial plan must submit to your plan for life.

In the coming weeks, I’m going to take you on a blog journey through an entire financial plan, including an examination of topics you’d expect—like how to judge your investments and determine how much life insurance you should have—as well as many you might not anticipate—like how to create your own Personal Money Story and articulate your Personal Principles.  We’ll discuss everything from homeowner’s and disability income insurance to navigating death and taxes.

Each week’s blog post will be on a different topic, building on the last, and will include online exercises you can download (at no cost) for your own personal use in developing your financial plan.  It’s not designed to supplant the intangible benefits of a personal financial planner, but to be a starting point, a supplement and/or a second opinion.  And throughout, we’ll work to maintain the real point of financial planning—a better life.

Commercialism In Valentine’s Day

So a couple days ago, my beautiful wife, Andrea, posted a seemingly random thought on Facebook:

I know I am going to sound like a grumpy old lady…But I don’t actually like Valentine’s Day.  It’s so fabricated and commercial.  Too much pressure for me 😉

Thanks to direct access to this particular source, I was able to delve further.  She told me, “It’s hard to feel romantic when everyone is trying to do the same thing.  It feels forced.”  What makes it feel forced, she concluded, was the overly commercial aspect of it.

Speaking of commercials, did you happen to catch the Teleflora ad during the Super Bowl?  My reaction to supermodel Adriana Lima’s floral sales pitch was to awkwardly preoccupy myself with the chips and dip to hide the spontaneous nervous laughter that erupted at its conclusion, as Ms. Lima instructed my gender: “Guys, Valentine’s Day’s not that complicated.  Give, and you shall receive.”  Feeling the stares of all the women at a small Super Bowl gathering, I attempted to declare, foolishly, with as straight a face as humanly possible: “That commercial was…um…effective.”

The ladies present gave me grace and laughed at my helplessness, but I can’t but wonder whether the forced romanticism of which Andrea spoke wasn’t perfectly personified in Teleflora’s wanton objectification of women.  (For a discussion on the wanton objectification of MONEY itself, check out my post on Forbes this week, “For Love, Not Money.”)  After all, my guess is that Teleflora didn’t spend $3.5 million to stir a healthy discussion over the inherent self-interest in gift-giving, but to sell a boat-load of roses!

Teleflora wants guys to give flowers, and there is no question what they implied guys should expect to receive.  So, we give this and we get…that.  Sounds much less like a gift and more like a transaction.  A transaction no respectable man should be willing to make.  A transaction that strips every ounce of romanticism out of Valentine’s Day, or any occasion for that matter.

A gift from a heart of love simply isn’t a gift unless it’s given without reciprocal intent.

It’s no wonder that the results of my unscientific poll, based on Andrea’s and my Facebook and Twitter comments and questions, revealed that 60% of respondents share generally negative sentiments about V-day, with an additional 20% blithely apathetic.

While I recognize all the reasons for turning our back on V-day as valid, my not-yet-completely-extinguished optimistic streak inspires me to redeem, instead of discard, this beleaguered day.  My friend and colleague, Joe Pitzl, put it well in his poll response:

Valentine’s Day has become a commercialized “Hallmark holiday,” but that doesn’t mean you have to let that destroy the spirit of what it really stands for.  Our society has effectively redefined celebrating a holiday (and why we celebrate it) as spending money on stuff.  We ought to remember WHY holidays exist in the first place…and pausing from our busy lives to simply celebrate our love for one another (whether you spend anything or not) is a great a reason to celebrate as any!

What do you think?  Are we capable of redeeming Valentine’s Day from its commercial, transactional devolution?

Customer Service and Survival

by Jim Stovall

Customers are like teeth.  The only ones you need to maintain are the ones you want to keep.

I hear news stories and ongoing news media coverage about how bad the economy is and how consumers are not spending money.  You wouldn’t know this from going into the average retail establishment today.  The majority of businesses you might enter to purchase a product or service do not provide a level of customer service that you would expect from someone that is not having enough retail revenue.

There is a local establishment near my office where we purchase sandwiches for lunch.  They do not deliver, so we go across the parking lot and pick them up.  They have asked us to fax our orders to them.  This was acceptable, except they explained that they don’t often hear their fax machine receive an incoming order, so they asked if we would call them after we fax in the order.  We set up an account so our staff can simply sign for the lunch when they pick it up.  I mistakenly assumed they would bill me monthly, but when I did not receive a bill for close to a year, I contacted them and had to go through an accounting nightmare simply to pay for all the sandwiches.

One day it occurred to me that I’m working way too hard in a bad economy to spend my money.  If I have to write down the order, fax it in, call and alert them they have an order, and provide them with accounting so I can pay my bill, I’m doing everything but making the sandwich myself.  This situation would be laughable if it wasn’t so commonplace.

I travel often for speaking engagements and movie or TV business.  A polite and professional flight attendant is rare enough that you really notice it when you get one.  This is unfortunate because, due to rising fuel prices and the economy, the airline industry is struggling.  Most airlines’ flight routes and fares are just about the same from one airline to another.  The real differentiating factor they have to offer would be great service, but this is not the case.

In most customer surveys, good service and a polite, professional staff rank high in the criteria prospects use to make buying decisions.  In most cases, great customer service and polite, professional attitudes don’t cost anything but a little effort and energy.  In fact, it is invigorating and enjoyable to serve others.

If you want to succeed, you’ve got to make it easy for people to do business with you, feel good about spending their money, and want to tell others about their experience.

As you go through your day today, determine to separate yourself from the crowd by providing stellar customer service.

Today’s the day!

Persistence and Procrastination

by Jim Stovall

Down the street from my office is a very large media complex containing a TV station, several radio stations, and a large conference center.  At one corner of the massive building, there is a large fenced area where several radio and TV broadcast towers soar hundreds of feet into the air.  Thousands of people drive by this complex every day and have seen the towers so many times they don’t even notice them any more.

Several months ago, a troubled young man—for reasons of his own—decided to scale the fence and begin climbing one of the towers.  By the time anyone noticed this young man perched on a precarious ladder hundreds of feet in the air, it was too late to stop him.  Police, ambulances, and emergency rescue workers were called to the scene and began efforts to persuade the young man to climb down from the tower.

The young man either ignored them or periodically threatened to jump.  As will happen with any large gathering, the media was soon on the scene.  TV, radio, and newspaper reporters began around the clock reporting of the ongoing activities of the young man who became known as The Tower Guy.

This went on for days and, somehow, the reporters found things to talk about.  The young man became dehydrated, sunburned, and appeared to be disoriented.  Finally, one heroic rescue worker was able to communicate with the young man and talk him into coming down.

The final media reports described how persistent The Tower Guy was in remaining on his perch for many days.  It’s important that we don’t confuse persistence with procrastination.  It is easy to think that persistence is doing something repeatedly or constantly while procrastination might be thought of as doing nothing at all.  In reality, too many of us are like The Tower Guy in that we persist in doing nothing of importance which, in reality, is procrastination as it relates to the things in life we know we should be doing.

Practice does not make perfect, in spite of the old adage.  Practice makes consistent.  Only perfect practice will make something perfect.  Persistence is only a virtue if we are persisting at doing things that matter to us and make the world a better place.

Most people perform activities today because they performed the same activities yesterday and will do it all over again tomorrow.  Before you do anything as a regimented part of a routine, make sure you know why you are doing it, what it will accomplish, and when you will be done.

As you go through your day today, make sure you’re investing every moment wisely and not just repeating mindless activities because that’s what you’ve always done.

Today’s the day!

Wet Paint

by Jim Stovall

There are several ways we can learn lasting and significant lessons.  Some people learn as an ongoing enjoyable part of life, while others have to learn everything the hard way.

If you find a painted wall somewhere around your home or office and put up a sign that says “Wet Paint,” without realizing it, you’ve created a perfect laboratory for observing human behavior.  If you simply stand by and watch, you will see human nature and the learning process take several forms.

Some people will come by, see your “Wet Paint” sign, glance quickly at the wall, and go on about their way.  These people are generally well-adjusted, reasonably trusting, and non-confrontational.  If you remove the “Wet Paint” sign, these people will often make it a point to avoid touching the wall for several more days and even go so far as to alert others that the paint on that wall may still be a bit wet, so they should be cautious.

If you continue your observations long enough, you will observe another kind of human behavior as it relates to your “Wet Paint” sign.  A person will come by, clearly see your “Wet Paint” sign, and immediately touch the wall to see if the paint is actually wet.  These are people who would not have touched the wall if you had not put your “Wet Paint” sign there in the first place.  Even though this person has damaged your paint job and gotten wet paint on themselves, if they come by later, whether your “Wet Paint” sign is there or not, they will actually touch the wall again and continue this same behavior for hours or even days until they learn, through their own experience, that the paint is no longer wet.

All of us have the potential of learning very valuable lessons each day.  Some people can learn by reading or hearing the words of others; other people need to observe the outcomes of other individuals; while many people have to learn the lesson the hard way every time or, worse yet, never learn the lesson at all.  While we may think these learning styles are innate or inbred, we actually have more control over how we learn and what we learn than we might realize.

In our ever more complex, fast-paced world, it becomes more critical than ever that we develop the ability to learn lessons from others who have gone before us.  You don’t want to be among the sorry souls that learn, the hard way, that the surgeon general’s warning about cigarettes or the pleas of financial planners to plan for your retirement years were valid.

With all of the multimedia opportunities around us and constant access to the Internet, we should be able to learn from others’ words or at least their actions without having to get a handful of wet paint every time.

As you go through your day today, commit to learning the most lessons you can in the easiest manner possible.

Today’s the day!

The Victory In Failure

This past weekend, my seven-year-old son, Kieran, got beat up.  Worse yet, I was forced to stand by powerless, watching the whole thing, unable to intercede on his behalf.  Thankfully, everything’s fine.  He sustained no lasting physical injuries although it may take a while for him to recover emotionally…from his very first official wrestling tournament. 

Believe it or not, at seven he’s two-to-three years behind most of the other kids his age, so he spent the majority of his three matches getting his 60 pound frame slammed and twisted into the mat.  After spending weeks building his skills and confidence, he realized within 10 seconds into the first bout that he was outmatched.  At the end of the second (of three) 60 second periods his disappointment crescendoed and erupted into tears, doubling his embarrassment.  He spent the third period struggling to keep from getting pinned with tears streaming down his face.

Personal Failure

The worst part was that he still had two matches to go, and having seen the other two kids wrestle already, we knew it wasn’t going to get any easier.  He wanted to quit and go home.  What was I to do?  Parents in the movies always have the right thing to say, but I was searching and finding nothing; that is, until I remembered Tim Tebow.

We live in Baltimore, and that means we root for two teams—the Ravens, and whatever team the Steelers are playing—but over the course of this season, our household also admittedly got wrapped up in Tebow fever.  We’re suckers for underdogs and comebacks.  But what impresses me the most about Mr. Tebow is not his ability to win, but his grace in failure and his impervious defense against capitulation.  Whether deified in victory or discarded in defeat, he seems to maintain the same sincere posture of positivity, even after Denver’s 45-10 loss to the Patriots.

Kieran indeed lost his final two matches, but got successively stronger in each.  In the third, his dedication even earned him a couple points against a far superior opponent and a small cheering section of coaches, parents and teammates anxious to affirm his courage in the face of sure defeat.  He carried himself with respect and a sincere smile on his face to the fourth place (out of four) podium.

Financial Failure

Kieran’s story has little to teach us about money, but much about failure.  In no period since the Great Depression has financial failure been so widespread and felt with such impact.  There are those, like my son, who did everything they could to improve their chances of success, but lacking a certain level of experience or knowledge found themselves pinned down by the weight of decisions that turned on them.  Even many of those eminently qualified and gifted—like my friend and financial planning colleague who bared his soul sharing the story of his real estate blunders during the crisis—were humbled in defeat.

Losing your home, losing your job, or losing your ability to retire due to market losses is harder to handle than losing a football game or a wrestling match.  Failure of this magnitude can be absolutely crippling.  But it is, indeed, possible to gain something from losing.

The Depression Baby generation became the best savers in U.S. history (see Beyond Our Means, Princeton University Press, 2011).  Foreclosure and bankruptcy have spawned inspired financial counsel that has changed the lives of millions for the better (see Dave Ramsey).  Many job losses have imbued the aggrieved with enough frustration towards corporate hierarchy that they’re becoming our next wave of innovative entrepreneurs (see report by the Kauffman Foundation).  And market losses have encouraged the first generation of early retirees to pursue meaningful vocations they’re happy to perpetuate over occupations they were racing to end.

I’d love to know what you have gained through loss or failure, so please share in the comments section if you’re willing.

(This wasn’t the only emotional experience I had with Kieran this past weekend relating to sports and somehow, in my mind, things financial.  I wrote about the other in my Forbes blog this week—you can read “What Do NFL Playoffs And Money Have In Common?” by clicking HERE.)

Horse Sense

by Jim Stovall

More than virtually any other animal, horses have impacted the way we humans have lived throughout most of recorded history.  Many of us who have lived in the 20th and now the 21st centuries, have no direct connection to horses, but there is still much they can teach us.

Recently, I was reading about draft horses which are very large, muscular animals that, throughout history, have been used for pulling great loads and moving very heavy objects.  A single draft horse can pull a load up to 8,000 pounds.  The strength involved in this is hard to imagine.  So then we can speculate what would happen if we hooked up two draft horses to a load.  If you instantly thought two draft horses could pull 16,000 pounds if one draft horse can pull 8,000 pounds, you would be wrong.  Two draft horses pulling together cannot pull twice as much as one.  They can actually pull three times as much.  The two draft horses that can each pull 8,000 pounds alone can pull 24,000 pounds working together.

The horses are teaching us a very clear lesson in teamwork, but they still have more to teach us.  If the two horses that are pulling together have trained with one another and have worked together before, they can’t just pull three times as much working together as they can by themselves.  The two trained horses in tandem can actually pull 32,000 pounds, which is a load four times as heavy as either of the horses could pull by themselves.

The powerful lessons that these magnificent draft horses can teach us involves not only teamwork but coordinated and trained collaboration.  No one lives or works alone as the proverbial island unto themselves.

I have many friends and colleagues who telecommute.  This is a phenomenon that has gained popularity in the last few decades.  Many people avoid lengthy and expensive commutes and high-priced office space by simply working from home.  This can be very effective and efficient for some people; however, just because there is no one else around doesn’t mean that these people work alone.

The very technology that allows us to work independently requires the coordinated efforts of more people pulling together than has ever existed throughout history.  We now work regularly with people whom we have never met.

Recently, I co-authored a book with Tim Maurer—www.TheUltimateFinancialPlan.com.  Co-authoring a book involves tremendous coordination and constant communication.  Throughout the process, it was vital that both Tim and I fully understood and agreed upon very sensitive areas and directions within the manuscript.  I’m very pleased to report, thanks to Tim Maurer and our publisher Wiley and Sons, the co-authoring of the book The Ultimate Financial Plan was a very productive and enjoyable process.  I think we have a far better book than either of us could have written alone, but the ironic fact is that Tim Maurer and I have never actually met one another.  I have been on his radio show, we have done teleconferences, exchanged video messages, and edited one another’s manuscripts, but we have never been in the same place at the same time.  Unlike the draft horses, we can multiply the power of one another’s efforts without having to physically be in the same harness.

As you go through your day today, harness the power and productivity of teamwork, but be willing to expand your definition of collaboration far beyond your own time and place.

Today’s the day!

10 Ways Budgeting Saved My Marriage

Eleven years ago, my wife and I sat across the table from an experienced married couple squirming in their seats uncomfortably as though they feared we were about to deliver some terrible news.  But the source of their discomfort was the bomb they were about to drop on us.

You see, we were not yet married, but engaged, and the couple across the table was our mentor couple in our pre-marital class.  Upon review of our personality profiles and piles of personal baggage, they felt it their duty to discourage us from further pursuing the sacred vows of matrimony.  They’d never seen a hopeful couple more innately disparate, more inevitably destined for failure.

We are indeed vastly different, but one thing my wife, Andrea, and I share in common is a penchant for resisting authority.  So with the blessing and support of family and friends, I’m thrilled to report we’ll be celebrating our eleventh anniversary this April with our two wonderful boys, Kieran and Connor, ages six and eight.

We have never forgotten, however, the well-intended admonishment of our mentor couple; indeed, we see much of life from vastly different perspectives, foremost among them our view of things financial.  And apparently, we’re not alone. Over 50% of marriages end in divorce.  Over 50% of those splits cite financial disputes as the primary reason for the break-up.

100% of marriages deal with money as a daily necessity.


This thought occurred several times when preparing my recent posts on budgeting on Forbes.com (How To Spend $1 Million At Starbucks) and TimMaurer.com (A Burdensome Yoke…Or A Path To Peace?).  It struck me that budgeting ranked right up there with prayer and counseling as a precious few factors that have helped keep us together.  Here are the top 10 ways budgeting has saved, and continues to save, our marriage:

10)  Budgeting forces us to collaborate.  It seems that as parents of young children, the level of commitments between work, school, church, sports and the arts leaves us functioning more as independent business partners than spouses.  We’re almost always in short supply of adult conversation and genuine collaboration, and (strange as it may seem) budgeting gives us the context for both.

9)     It offers healthy accountability.  Ronald Reagan famously said, “Trust, but verify,” and while 100% verification of trust in our marriage would be stifling, we’ve found periodic accountability to be a healthy way to build faith and trust in each other.  Our joint budgeting effort means all of our expenditures are accessible to the other.  Scrutinizing every penny spent would be unfair (a-hem, note to self), but knowing everything is visible is likely to encourage us each to spend more responsibly.

8)     It humbles us.  I’ve not found a more helpful tool in the pursuit of a successful marriage than humility, and since the use of money is so pervasive in our lives, small mistakes are the norm, not the exception.  Rarely a weekly cycle goes by in which we don’t each humbly acknowledge that we erred in some capacity, humbly submitting our mistake to the other.  And of course, a good budget is designed to withstand these small mistakes.

7)     It provides an opportunity for reconciliation.  The prevalence of small errors in our budgeting, however, provides fertile ground for a destructive tendency: that we’d develop a scorecard, real or implied, and shame the more regular offender (because there normally is one in most households).  So for us it’s very important that a humility ground-rule is established: Any time an offending spouse submits in humility to an irreversible mistake, forgiveness and reconciliation is the only way forward.

6)     It gives us reason to celebrate.  For each mistake, there are several successes in each budget cycle.  The long-term success of our marriage is often built on a series of small victories, and we should never withhold an affirmation for completing a project under budget or enjoying the security of a buffer when an emergency arises.

5)     It cuts down on surprises.  So many aspects of our life are subject to variability and volatility.  We can’t necessarily reduce the number of those surprises, but we can certainly reduce their negative impact by being financial prepared for them.  Financial strain, and especially shock, pushes many marriages to (and over) the brink.

4)     It makes us better parents.  All of us parents could probably agree that it’s possible to spend too little OR too much on our children, right?  We’re responsible to determine what the right levels of spending are for our children, and budgeting allows us to deliberately set aside appropriate levels of funding for education, clothing, sports, music and fun.

3)     It shows our dependence on each other.  Andrea and I do think very differently, and this inevitably leads to divisive thoughts like these: “You know, I think I could do this better on my own!”  But this decries the very essence of marriage as an institution in which each partner’s primary objective is to serve the other.  The process of budgeting puts our (literal and emotional) dependence on each other on full display.  That makes us vulnerable, but it’s good.

2)     It preserves a healthy level of independence.  The income production in most households is almost never perfectly equitable.  Andrea sacrificed a successful career in the financial industry when she chose to stay home with our young children.  This has been an incredible blessing in our family, but it’s also a breeding ground for insecurity and manipulation as I might have a tendency to overestimate my contribution to the family’s finances and underestimate Andrea’s.  It is imperative, then, that part of our budget is the preservation of a certain amount of financial independence for each spouse.  To offset this income inequity, we’ve established “His and Hers” accounts with unilateral privileges.  Many shun budgeting as too restrictive, but properly implemented, it actually gives us room to breathe financially, and we all need room to breathe.

1)     It preserves date night!  One of the interactions I’ve enjoyed most throughout my career was with a client who is a generation or two my senior.  He and his wife have five kids(!) and appear to be more in love today than they’ve ever been.  So at the close of one meeting, I got up the nerve to ask this gentleman what his secret to marriage and parenting was.  His answer?  They never fail to set aside time—and money—for each other as a couple.  He made a convincing case that we are better parents when we deliberately setting aside time to be together, away from the kids, and not just for date nights, but also long-weekends and even week-long vacations to remind ourselves that before we were parents we were lovers.  This proved especially difficult for Andrea and me because by the time we got to the end of most months, we’d already spent our discretionary cash on the rest of life and felt like we were taking funding away from other things to line-up a babysitter and enjoy a night or weekend out.  So now, much as we have preserved His and Hers accounts, we also have an Ours account.

Budgeting is not the slightest bit romantic, but it has the ability to promote and preserve the romance in our marriages and keep us on the right side of that daunting 50% divorce statistic.  There are as many good ways to manage this process as there are couples, and I’d love to hear some of the ways budgeting has helped preserve YOUR marriage also, so please share your story in the comments section!