Transcript
00:00:09 TONYA: This is going to be a fun session because today we’re talking money management for couples. Let’s get started. (Music)
00:00:15 I'm Tonya Rapley. Welcome to a new series from State Farm and let’s start today. This is where you’ll find the tools, support and education you need to take control of your finances today and reach your goals for tomorrow. These helpful courses are inspired by an ever-evolving learning lab known as Next Door State Farm.
00:00:35 And speaking of Next Door I have Dan, a financial coach at Next Door State Farm and Axel, a State Farm Agent. Thank you, guys, for joining me.
00:00:43 DAN: Thank you for having me.
00:00:44 AXEL: Happy to be here.
00:00:45 TONYA: So let’s help couples strengthen their financial relationship. You ready to talk money counseling?
00:00:51 DAN: Ready.
00:00:51 AXEL: Let’s do it.
00:00:52 TONYA: So during this we’re going to cover typical problems or hurdles that couples encounter, helping couples define their financial goals, building a budget, to join or not to join and helpful budgeting tools for couples. (Music)
00:01:09 FEMALE: Well, I give him the pleasure of being the boss.
00:01:12 MALE: I would say I am. Yeah.
00:01:16 FEMALE: Well, I do like shoes and periodically a little retail therapy. Not too bad. But I let him handle that. Shoes aren’t hurdles. They are absolute necessities. A need and a want.
00:01:34 TONYA: Alright, so both of you work with couples on a regular basis. What are some of the obstacles that you see couples encountering when it comes to managing their money?
00:01:44 DAN: Yeah, I mean, I think the first one is communication. And it’s probably the biggest one.
00:01:49 TONYA: Biggie, yeah.
00:01:49 DAN: Right. Money’s kind of a taboo topic to talk about and so we often don’t have it. We don’t really know how to have that conversation, maybe we learn money from our parents. And by the time we learned it they were already either merged or not merged, they knew what they were doing, so they just don’t have the conversation.
00:02:05 TONYA: Absolutely. Communication is key and I think that people have a fear of being judged by their partner or that their partner might not find them as attractive because they don’t have good financial habits and they kind of keep it to themselves. What about you Axel?
00:02:17 AXEL: Sure. I think transparency is extremely important. And I would lump this right in the religion and things of that nature. It’s an important topic and they have to make sure that they are on the same page and talk it out.
00:02:26 The first thing that I find when I meet with couples is, they don’t have the transparency yet, they’re still trying to figure out what the other person is doing, how they’re thinking, what their philosophy is. They’re still trying to sort all that out, as they move forward in this long-term relationship, they haven’t had these conversations. And sometimes they’re having that conversation for the first time in front of me.
00:02:45 TONYA: Oh, fun.
00:02:46 AXEL: So it’s great. I mean, you got to have the conversation.
00:02:49 TONYA: Adds variety to your day though.
00:02:50 AXEL: It does. It does.
00:02:50 TONYA: What about you Dan?
00:02:51 DAN: I totally agree. It’s communication. Sometimes it’s hey, we’re going to you, because this holds us accountable. We’re going to sit down and have a conversation because we have to, that’s what we’re here for.
00:03:01 TONYA: Absolutely. And I think that most people don’t have that conversation until they reach a problem. It’s important to have that conversation before the problems start so that you can make sure you’re on the same page regardless of what happens in your relationship.
00:03:12 DAN: I mean talking money, right, it’s not about money, it’s not about dollars and cents, it not about this bank account, that bank account, it’s about hitting your goals together, which we’ll talk more about, right? But people feel embarrassed, I have this debt or maybe even I'm embarrassed that I'm so good and I don’t want to like to be intimidating. I’ve seen that.
00:03:29 TONYA: You’re so good at this.
00:03:29 DAN: I am. I’ve seen that. And so it’s like it’s just a conversation that we just don’t have, we find something that works and we just stick with it.
00:03:36 TONYA: Other than communication what would you say is another common problem that couples encounter?
00:03:41 AXEL: I think probably just their philosophy. What is it? Or what is our goal? Are you aspiring … some people say, they’re renters and they might want to be a home buyer someday? Or they’ll say we’re not going to do that for a few more years and I’ll say well if you have a plan and if you understand it, you’re educated you can aspire a lot easier and a lot better. And I think that’s usually one of the things that we try to get out of the way as quick as we can.
00:04:05 TONYA: Yeah.
00:04:05 AXEL: Is don’t feel like you need money today to do something, because if you are aspiring to this goal it would be much easier to accomplish.
00:04:11 TONYA: Absolutely, absolutely.
00:04:13 DAN: And I think a lot of the times the conversation comes around to risk. And Axel actually mentioned this in a conversation we were having beforehand where you know sometimes somebody is like, hey, let’s get out there, let’s grow this money, let’s go crazy. And the other person is like whoa, I didn’t think that was our plan.
00:04:27 AXEL: Put it in the mattress.
00:04:28 DAN: Yes, exactly. Exactly.
00:04:30 TONYA: Put it in the mattress.
00:04:31 DAN: And if that conversations not had, right, we might be working toward the same goals, we might be totally aligned and trying to get there two entirely different ways.
00:04:38 TONYA: Communication I think is the basis for all of this. But also just understanding how each person grew up when it comes to money, because some people witness different role models or financial role models in the household and some of us didn’t have financial role models at all in our household. And how does that affect what you perceive to be your role in this relationship. So I think that’s important too.
00:04:58 AXEL: Totally agree.
00:04:59 DAN: When it comes to undergrad, for example, how your parents, did they get a degree, did they both get a degree? How did they pay for it? How did you pay for yours? Did you get one? Those are the things I think will also drive, it’s all relative. So I got my degree paid for by the Army because I did ROTC. So that’s my perspective. Even though my parents had the money that’s how I chose to do it.
00:05:18 Another couple might say well I had to work through college, I had to bus tables. I had loans. Whereas their spouse or boyfriend or whatever had all that given to them. So their perspective on how we are going to save money for college for kids instantly is now different. And again for the first time they’re having this conversation in front of me and as long as the transparency is there and they talk about it, it will all work out fine.
00:05:39 TONYA: Yeah, and I'm happy you mentioned that because I think that when you’re intimately involved in a couple’s financial matters, the way that we are, you kind of develop these tools to help people tease out that financial tension and one of the things I’ve learned is tone, tact and timing for having financial conversations.
00:05:55 DAN: I like that.
00:05:55 TONYA: Watch your tone, remain tactful and think about the timing because every time is not the right time to have a financial conversation and sometimes you want to have that conversation when you encounter a hurdle but it might not be the time, you know, at the dinner table you might not want to talk about the shoes you found in the trunk or something like that.
00:06:12 DAN: Well, that’s why I think that communication is so important, right, because a lot of times this stuff is going to come out one way or the other. If you choose kind of the time, the place, the tactic, it’s a very productive and honest and growing conversation, and if it’s a snide remark when you find shoes it doesn’t work the same way necessarily.
00:06:30 TONYA: Not at all. Absolutely. So I think that hurdles will occur, you know, things will happen, but it’s about communicating and working through those hurdles together as a couple so that you can get on the other side and reach your financial goals, right?
00:06:44 AXEL: Absolutely. It’s a team approach. And like at my house, for example, I happen to love washing the dishes. I think it’s therapeutic. I hate ironing. So we have our assigned duties and sometimes finances are assigned to one person but you still have to have a backup if you can’t do it or they have to have understanding as a team.
00:07:02 TONYA: Absolutely.
00:07:02 DAN: I love the dishes too. But it’s dusting for me. I hate dusting.
00:07:06 TONYA: Dusting. Okay. Well, both of you guys can come over. (Laughter)
00:07:10 AXEL: There you go, we can do all your dishes.
00:07:12 DAN: But if I had like one takeaway it can feel uncomfortable, it can be hard to do, but have the conversation. I cannot tell you the number of people I’ve worked with, we’ve had a conversation and it didn’t go exactly like they wanted it to and they still felt better afterwards than if they hadn’t had the conversation at all.
00:07:28 TONYA: I agree. Have it anyway. Other than us, you know, and a few select people, I don't think anybody really enjoys talking about money, but have it anyway and you’ll be happier that you did.
00:07:38 DAN: You enjoy hitting your goals. And you need to have that conversation if you’re going to do that. It’s been my experience.
00:07:43 TONYA: So we’ve covered how couples can handle financial obstacles and deal with those different issues that may come their way, right? Let’s have a look at what we’ve learned. (Music)
00:08:15 FEMALE: It’s probably more goals like you said. We know we want to put money for college, we know we want to put money for retirement, we know we want to put money for fun. So it’s not a strict budget like a lot of people do, it’s more like goals, make sure we’re putting the money in those spots.
00:08:35 TONYA: Alright, so goals. We’ve kind of touched on this, but let’s really get into this, because I think everyone has financial goals, but some of them are more explicitly stated. How can we help couples create goals together?
00:08:48 DAN: Yeah, I think that’s a great question. I think a big part of that is recognizing that while you are a couple, you’re also two individuals. You may have separate things you want and those both need to come to the relationship and be considered.
00:09:01 So that’s a big piece for me is you know people say what should our goals be together? Well, they should probably be what your goals are separate with some emphasis, some change, some prioritization based on who you are as people together.
00:09:13 TONYA: Yeah, there’s usually some overlap in there, right?
00:09:16 DAN: Yes.
00:09:16 TONYA: Even though your separate individuals, you probably have the same values and same beliefs and same goals and so forth. So there usually is some overlap.
00:09:24 DAN: Yeah, absolutely.
00:09:24 TONYA: What about you Axel? How do you help people sort through that goal setting process? Say there’s a couple and we don’t have any goals, what can we do? Where should they start at?
00:09:34 AXEL: I'm sure it’s pretty common for somebody to say our goal is to have goals. (Laughter) So off we go. I think just talking about it. I'm writing down in the next year, in the next five years the short term, medium term, long term goals and I love what Dan said, I think it’s really important for them to feel like they should have their own individual goals and figure out where they overlap so that they can go together in the same direction and maybe compromise on some things that maybe they’re not going to be able to achieve because they can’t do it all.
00:10:00 TONYA: How should people begin to identify what those smaller goals are?
00:10:04 DAN: Absolutely. So we’re going to talk a little bit about that when we talk budget, but I really think it’s start thinking about what does your day to day look like and am I okay changing that or not. Right, because if you are living and you’re saving but maybe you’re not saving a ton or maybe you’re not saving at all, right, and you’ve never had a money goal before. You didn’t know you could do that.
00:10:21 And so you want to sit down, you ought to write that out because that’s how we accomplish anything. But you have all these big dreams. Well, that means probably living a little differently than you’re living right now. Not saving anything. So are you comfortable changing that day to day? And then is your partner, right, and having that conversation. How much change? Where is that going to happen? It’s conversation that has to happen together.
00:10:41 TONYA: Absolutely. Typical common goals, Axel?
00:10:44 AXEL: Most couples that I meet with I think are all in agreement that they want to eliminate debt, they want to have a retirement plan they want to have a retirement plan outside of work. They want to have education savings for their children. I mean, it’s very common to have those kinds of things. But again writing it down and funding it is where it’s got to start, got to talk about it.
00:11:05 DAN: And I’ll throw one in there. Just feeling secure. A lot of times people haven’t had an emergency fund or they don’t really know what that should look like. And it’s such a huge relief to have that. But they don’t exactly know how to articulate that.
00:11:19 And to your point something we use all the time, this analogy of dollar signs and deadlines. When you’re setting a goal, it’s going to either be in dollar signs or deadlines, it’s not just I want to buy a house. It’s what type of house, when, how much do you need? Like that’s how you actually make a goal.
00:11:36 TONYA: Yeah.
00:11:37 DAN: That you’re hopefully going to stick to.
00:11:38 TONYA: Definitely. And then I'm a big fan of once you create that goal write it down and make it visible and place it around the house, put reminders wherever it would be in your view. I know that my husband and I we had a vision board date where we sat down, we did vision boards together and now our vision boards are framed like artwork in our house, but we walk by them regularly so that we both are looking at our visions for ourselves and our visions for our household and what our goals are as a couple as well.
00:12:05 AXEL: I'm going to steal that idea. I'm going to make a placemat for me and my wife and my kids. And we’ll have that every time we eat, it will be right there for us.
00:12:11 TONYA: You sit down, this is what we’re working towards.
00:12:13 DAN: That’s great, that’s a great idea.
00:12:14 AXEL: I’ve had a lot of couples who it’s been on the steering wheel so they have to like take it off and then put it back on, you know, whether it’s just a little post it or a piece of tape or whatever it is.
00:12:24 TONYA: Yeah, reminders are powerful. So I think just writing it down and placing it around. So we set our goal, but now we’re writing it down and making it visible, so that we don’t forget what we’re working towards.
00:12:33 DAN: And one of the things with writing it down again one kind of takeaway I would put from this section is as we’ve all talked about, write those goals down but I actually really love the idea of write those goals down separately, come together and discuss them.
00:12:48 TONYA: Yeah.
00:12:48 DAN: Right, because sometimes you’ll be like oh, my partner is right, they’re smarter about money or they’re on a better track or they’re doing whatever they’re doing, so I'm just going to agree with whatever their goals are. That’s not how it should work.
00:12:57 TONYA: Yeah, and those aren’t your goals necessarily.
00:13:00 DAN: Yep. So write them both down, avoid that group thing, come together and say, hey, this is priority one for you and priority six for me. It’s probably somewhere in the middle. Or, hey, all our friends are doing this, but it’s priority five for both of us, maybe we want to focus on something else.
00:13:15 TONYA: Yeah. And I know I was talking to one of my friends and she said that her and her husband they write their goals down and they identify how important each goal is to them and then decide where they’re going to push, pull and bend based on how important it is to the other person.
00:13:27 Say one is the most importance to you then okay, we’ll work on achieving that, but if this goal is a number eight to you, okay, well, maybe that’s not as important, but we’ll work on your number one and my number one. I think we can agree that people are going to have individual goals but they’ll also have goals as a couple. And we want to create an action plan for achieving those goals. (Music) Let’s have a look at what we’ve learned. (Music)
00:14:04 MALE: For vacations we’ll think about, you know, first you want to decide where do we want to go and what kind of a vacation do you want it to be and think about that, a year or six months ahead of time and then you start planning towards accomplishing that goal.
00:14:17 MALE: I would say one thing that worked well for us is like points. So we try to get like debit cards or credit cards that will give us a lot of points that we can use. So what we really try to plan for whenever it comes to vacations are those extra expenditures so we’ll tend to spend more on the hotel room if we’re spending points on airline tickets or more money on food and things like that daily, because we’re not spending so money on the airline tickets.
00:14:40 MALE: Yeah, we try to be smart about that and say how many airline miles do we have and where can we go with that, because that takes a large portion out of that cost that you can reallocate to having fun or doing dinner or things like that.
00:14:52 TONYA: Alright, so building a budget. Budgeting is major for everyone. But budgeting also can be a problem for some people. So how do you recommend that people not just build a budget for themselves but as a couple? What’s the first step they should do?
00:15:06 AXEL: When I meet with couples, I'm a huge proponent of having a spreadsheet and filling it right then and there. Normally they’ll have preassigned homework where they’ll come with that information. How they do it, whether they do it on paper or whether they type it out. I like the electronic soft version, soft copy. That’s me.
00:15:21 But more importantly I think is not only just having the tool but how do you hold yourself accountable and how are you go to execute it.
00:15:28 TONYA: Absolutely.
00:15:30 DAN: I totally agree. So when we start talking budget or when I start talking budget with someone, I always start with looking backwards. At the end of the day I have people come in and are like hey I know I'm not saving money, here’s my new budget. I’m going to spend $50 on food this month.
00:15:43 And I go, okay, let’s take a look at what’s been happening. They’ve been spending $400 on food, I'm like, okay, you’re going to starve. So let’s maybe set something a little more realistic.
00:15:51 TONYA: Yeah.
00:15:52 DAN: And so with that I break it down into three categories. So I start with the fixed expenses. And those are just the things that do not change. So your rent or your mortgage, right, that’s the same every month.
00:16:05 TONYA: Daycare.
00:16:05 DAN: Daycare. Absolutely. Your variable expenses. So these are the kind of things that do change, you’re dining out, your clothes, your gas. And then what I call non-monthly’s, which are those things coming up that are going to bust your budget, which you’re probably thinking about. They can be one off things that only happen once, so like a wedding, or maybe someone’s birthday or a gift around the holiday.
00:16:29 They can also be routine things, right, so maybe when you get your tires rotated, that happens at a set amount of time. Or maybe you pay your property taxes every six months. Those sort of once time but they do reoccur.
00:16:42 TONYA: Yeah, absolutely. We just got our auto registration renewal. And we weren’t planning for that because we just moved to a new state. But now I know to plan for that in our budget going forward.
00:16:51 DAN: I think car maintenance, registration, all of that are great examples.
00:16:53 TONYA: Absolutely.
00:16:56 AXEL: And clearly in my office we see that all the time. So from my chair we’ve got ways to help mitigate that. And I usually will help couples with. So without buckets, it’s more like you’ve got your kind of bad things, things that are unexpected, things that are emergency like and then your more fun, because you want to spice that chat up a bit, you don’t want to think it’s all about the homeowner’s deductible or whatever.
00:17:15 So I think it’s important for people to have both angles on that because you know when people are getting married, they don’t just show up and say, hey, come to my wedding tomorrow. So there’s that planning and the non-planned. And I think that’s what people have a hard time understanding, well, how much is appropriate? What would I need?
00:17:31 Well, what’s your deductible? What’s a normal car repair? I mean, those kinds of things, because otherwise it sounds very doom and gloom or it sound very rosy. And it can be both. And we just don’t know.
00:17:42 DAN: So, yeah, when we talk about emergency funds, we really think about them for four main things. There is home repair, car repair, medical issues, so that could be you having a medical issue, maybe a disability or it could be, hey, I need to fly and see a family member who’s ill, some expense from there. Or it could be job loss. So those are kind of the big four.
00:18:03 TONYA: And Axel when you’re working with couples are there any items that you see that they aren’t including in their budget that you would like to see them include more of in their budget or that you’d like them to take into consideration?
00:18:13 AXEL: I think the key for that is the homework assignment. So normally it doesn’t happen in the first appointment. So I send a lot of homework. So that is part of it, is trying to nail down all of that information, because otherwise there’s a lot of gaps and you’re not really going to be able to plan with 80 percent of the solution.
00:18:29 TONYA: What about you, Dan, are there any items that you say, you know you didn’t include this in your budget and I'm wondering why?
00:18:35 DAN: For me that’s retirement, because a lot of times when we’re just starting out or even if we’re not just starting out, that’s automatically out of the paycheck into a 401k. And so we start working our budget from what comes in and then we start working on what comes out and we don’t even think about it, because that’s already come out. You know what I mean?
00:18:54 When our what comes in, it’s take-home pay. It’s after taxes, it’s after retirement. So we don’t really think about retirement and then maybe we find out, hey, the reason one person’s making less than the other is they’re putting away ten percent and the other person is putting away two percent. And so having that conversation of what does retirement look like, what do we want it to look like, where should that be coming from, who should be saving it, it’s an important conversation that sometimes gets missed.
00:19:16 TONYA: Definitely. Budgeting isn’t for everyone but everyone needs a budget. And I think we’ve identified different ways that couples can create a budget that works for them. Let’s have a look at what we’ve learned. (Music)
00:19:54 MALE: It’s pretty much separate right now.
00:19:57 FEMALE: We’re separate. Separate but equal.
00:20:00 MALE: Yeah. Well, separate because I might have an account that I use to do things out of and she may have an account that she uses to do things out of, so it’s pretty much separate to just kind of go that route.
00:20:14 TONYA: Right now to join or not to join. Everybody has an opinion on this. I'm interested to hear what your opinion is on whether couples should join or not join their accounts.
00:20:24 AXEL: I think this is another example of that first conversation for the first time where you will hear one of them say something about an asset that they have that the other person has no idea of. So I'm a huge fan of joining. I think it’s important for them to at least have one bucket that they join together, so that they can work on whatever that needs to be and sometimes you’re going to find that they’ll need their own money over here for their own special deal if that’s how they’re built.
00:20:48 TONYA: So at least one account, join at least one account, right?
00:20:51 AXEL: At least one.
00:20:51 TONYA: Okay. What about you Dan?
00:20:54 DAN: So I so often have people come in and they say should we join or should we not join? Like it’s this binary everything is combined or nothing is combined.
00:21:03 TONYA: All or nothing, yeah.
00:21:04 DAN: It’s a spectrum, right?
00:21:05 TONYA: I agree.
00:21:06 DAN: It is totally a spectrum. I have had people without have every single account combined, maybe that’s one, maybe that’s ten. I’ve had one combined. I’ve had nothing combined. And I’ve seen relationships work no matter what.
00:21:17 AXEL: Every couple is different. And I think we’ve said a few times that there is no right or wrong way to do any of this stuff. But there are some couples where I think one of them will spend less and they’ll have remorse when they do spend. Where the other one, I think the one that doesn’t have the budget, probably, spends it with no problem whatsoever.
00:21:33 TONYA: Yeah.
00:21:34 AXEL: So you’re trying to help them both enjoy life and try to help them figure out a way that it will work well for them. But at the same time there’s just no right answer. There’s no universal fit.
00:21:43 TONYA: But I do think it adds another layer of accountability. You know you become accountable to your partner when they’re able to see your financial goals and say, hey, hon, we’re not really … so we said we wanted to achieve this goal, your spending tells me otherwise. Like what’s going on? Are we still on the same page? Are we still on target for achieving this goal?
00:22:01 DAN: One hundred percent. When I got my first joint account with my wife boy the amount of silly stuff I spent went way down, because I didn’t want her to see it. I think the other thing you run into to your point is there are spenders and maybe not spenders, but there’s also very different incomes potentially.
00:22:18 TONYA: That’s true. Yeah, definitely.
00:22:19 DAN: Like what is fair for me to contribute to our joint if you’re making twice what I'm making or three times what I'm making?
00:22:26 TONYA: Dan, I'm happy you brought that up, because I think that sometimes it is important to understand, if I earn double your income should I be contributing the exact amount to our household account? And what does that look like? And it’s important to identify if that other person is comfortable contributing more to the household or if they expect you to contribute the same exact amount? Absolutely.
00:22:46 DAN: Yeah.
00:22:46 TONYA: And I’ve seen where families and couples divvy up their accounts is, we keep everything separate or we merge some of our accounts and keep some of our accounts separate. Or we merge everything. And I think those are the common three options. But it’s up to a couple to decide what works for them. And even if they do try one and it doesn’t work out you can try the other ones. That’s the great thing about money. If something doesn’t work for you, then you can try another method.
00:23:09 DAN: I totally agree. And to your point with that income, I personally, and I’d be interested in your thoughts, see most people start 50/50. They split everything 50/50, because they probably haven’t talked about things like salary and income. So once you have that conversation maybe in Axel’s office, then you’re able to have that, hey, should I be paying two-thirds, maybe because I'm making twice what you’re making? And you can kind of decide what’s right for you. So I don't know if you see that.
00:23:34 AXEL: I see it all. The majority of people I think go with the 50/50. I mean, it’s all going to one account. And they’re just setting up their buckets together. And they might have a bucket for one person and a bucket for the other, for their own individual purchases that they want to make. But it’s very transparent and they talk about it and that seems to be the best solution that I see, but again there’s no universal fit and there’s no wrong answer.
00:23:57 TONYA: There are different ways to manage your money as a couple and whether you join or decide not to join our finances is completely up to you. So let’s have a look at what we’ve learned. (Music)
00:24:26 FEMALE: I track it every day to make sure no, somebody’s not hacking your account you know charge some things. And I keep on top of everything to make sure to know checks that I wrote that came in clear and you know so checking balance I do that.
00:24:43 TONYA: Alright, so we’re moving into our last section. And let’s discuss helpful budgeting tools available to couples, because we set those goals, we set a budget, we know how we want to manage our money, what tools that we have available to us to ensure that we continue on the path to financial freedom.
00:25:02 AXEL: Well, there’s no shortage of tools. That’s for sure. There’s all kinds of great budget tools, there are spreadsheets, there’s apps. I think what’s missing is an execution app.
00:25:12 TONYA: Execution app.
00:25:12 AXEL: That’s what’s missing. I think people just have to make sure that they’re doing something, they’re evaluating what they’re doing, they’re re-evaluating what they decided and evolving as changes come into play.
00:25:23 TONYA: Absolutely. I'm happy you mentioned those different types of tools available to them because you also might realize that my significant other prefers to use software, I prefer to use paper and pencil. Doesn’t mean either one of us is right or wrong. We just, as long as we’re doing something, right?
00:25:38 DAN: And I think couples have a huge advantage, because they have a built-in accountability partner, right? I lie to myself all the time, oh, I needed a coffee, I was running late to a meeting and I was going to be a zombie. Oh, I needed to get this. It was my friend’s birthday and I owed them…
00:25:51 But when I have to share that information with a partner, hey, we didn’t hit our goals because I bought too much coffee, I mean much more likely to execute, right?
00:25:59 TONYA: Exactly.
00:25:59 DAN: It goes from an I need it to oh, I failed and although that sounds negative, it can also be a motivator.
00:26:05 TONYA: Exactly. And one of the things that’s popular is automation and using automation as a tool to continue to ensure that you’re working your budget. But is automation trickier when you’re in a relationship or when you’re managing money with someone else?
00:26:19 DAN: Frankly, I think it can be at first, because when you’re first setting it up there can be more accounts, there can be more goals, there can be … I mean, there’s two paychecks for that matter. There’s more income. So I think it can be, but I think once it gets going it certainly doesn’t have to be. I think automation is all about kind of making your money work for you.
00:26:38 If you every month at the end of the month transfer some money into savings every month, you’re making the decision to save. If you have some money coming automatically out of your paycheck into a savings account, every month you have to make the decision not to save.
00:26:54 TONYA: Absolutely.
00:26:55 AXEL: I think out of sight out of mind through automation is fantastic. But again as long as we are re-evaluating what we did, because if you put the time and the effort and the work in the solution that you come up with, great. That means you made the decision that made sense then, so as things evolve you have to evolve with it and your finances have to come along with you.
00:27:13 So I think that’s why it’s so important just to make sure that we don’t just set it on auto pilot and ten years later oh, you know what I was only saving $50 a month because that’s what I could afford. Things have changed after ten years.
00:27:24 TONYA: Absolutely. And I think that, you know, get creative with the tools available to you. I think we often think about apps that help you manage your budget or help you save more, you know, different spreadsheets available to you, but what about tools that just help you build a stronger financial foundation?
00:27:38 So I know that you mentioned you and your wife, you have reminders set on our phone to remind you of your financial goals. But I think that’s a tool as well.
00:27:45 DAN: Yeah, absolutely. Yeah, I there’s goals that actually work with the money but then I think at the end of the day, especially if maybe you’re changing, maybe had something automated and it’s time to change, money comes down to habits, right, your spending is by habit.
00:27:57 So you really need to figure out a tool maybe like a reminder that’s going to help you break a habit. And this is where I love spreadsheets build, they can get us into trouble. If I look at a spreadsheet and I say, hey, I didn’t hit my goal last week, and I don’t change any of my behavior, not going to hit my goal this week, right, I have people come in who use an app and they’ll come in and they’ll say I’ve looked at the app the last four weeks and I didn’t hit my goal any of the times, am I bad at budgeting? I'm like no, you’re good at tracking, but you haven’t tried budgeting yet. Really?
00:28:27 TONYA: Yeah, definitely. And Axel I mean I think that you’re right it’s that action, right? It is taking that action so finding apps that also inspire you to take action or remind you to take action.
00:28:36 AXEL: The onus is on the person. There’s no app that’s going to replace the fact that they have to make the decision to do. And to your point you’re tracking things but what are you doing differently? And that’s where the intimacy and the transparency around what goes out is just as important as what comes in.
00:28:53 DAN: Yeah.
00:28:54 TONYA: I found that one tool that helps me and my husband is we have a shared calendar. So we have a shared electronic calendar and we have a calendar placed in our household. So we’re really visual, clearly around our house. But we have a shared calendar, so even though I might be responsible for paying certain bills we have it written on the calendar so he knows what I'm paying. I know what he’s paying. But we also place our schedules on that calendar because time is money.
00:29:14 So we also want to know how each other is spending their time outside of when we’re together and so that we can also plan for things as a couple and as individuals. So that calendar has been a valuable tool in our household that it’s kind of outside the traditional financial tool spectrum, but it works just as well and it’s just as important for us.
00:29:32 AXEL: And I love the transparency, like that you can’t be any more transparent than that.
00:29:35 TONYA: Yeah.
00:29:36 AXEL: And so I think it’s fantastic. And what I love about all of this is again there’s no shortage of ideas. Or tools. I mean, again it’s do something. Make sure you’re executing whatever plan you come up with and revisiting it. That’s what it comes down to at the end for me every time.
00:29:52 DAN: And being okay with failure. Do something. It may not work, try something else. Or it may not work that week and you try it again and then it works. And then you fail. And then it works for two weeks and then you fail. And then it works for three weeks and eventually you’re stacking success it becomes a habit.
00:30:08 TONYA: We all have different ways of managing our money and taking advantage of the tools available to us. But I think we’ve identified that, find the tool that works for you, right? Let’s have a look at what we've learned. (Music)
00:30:34 There are many ways to manage your money as a couple, right? But I think we’ve identified you have to find the way that works for you. Thank you so much Dan and Axel for joining me and talking about this important topic.
00:30:44 AXEL: Happy to be here, it’s been fun.
00:30:46 DAN: Thanks for having me.
00:30:47 TONYA: Make sure you check out all of our tools, support and education as well as all of our other courses. Thanks for joining us. See you next time. (Music)
