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How Not To Get Divorced

Why We Fail At Money

What’s up, money masters? I’m excited to share with you a little bit of an intro to why we often fail at money. This comes from one of my favorite little pamphlets. It’s called One for the Money by Marvin J. Ashton. This is something that came out of the 1975-ish, late ‘70s, and early ‘80s during a time of hyperinflation like we’re dealing with right now during a time of economic upheaval and uncertainty. Revolutionary thinking was happening coming out of the ‘60s and ‘70s and the way families were managed. It was a weird time for some reason.

Our personal financial lives started to get really distressed at this period of time. This gentleman, Mr. Ashton, he says this, “Recently I had the opportunity to visit with a choice young couple. They were to be married within a week. Their eyes sparkled with anticipation of the important event and with evidence of their continuing love for one another. Both had the advantages of a college education, good homes, and cultural experiences. It was delightful to share their personalities, plans, and potential. Their courtship already seemed appropriately launched on an eternal basis.

During our interview, their responses to only one question gave me concern. I hope my anxieties and suggestions caused them to reassess their pending partnership. To the question, who is going to manage the money in your marriage? The young woman responded, “He is, I guess.” The young man responded, “Haven’t really talked about that yet.” After Mr. Ashton, and he said, “These comments surprised and shocked me.” As it would me personally. Like if I sat down with my daughter or son and their spouse and had a conversation with them and said, “What are you guys going to do about money?”

Money Management In Marriage And Family

They both said, “I don’t know. We haven’t really talked about it.” I would just be dumbfounded. Like seriously, how important are money management and finances in marriage and family affairs? It’s tremendously important. It’s like the lifeblood of a marriage. If you don’t have financial resources figured out, a good income, and more important than good income, is good management of money. It is a precious resource, guys. Too often we let our laziness, we let this belief that somehow somebody else is going to take care of it for us.

Somehow it’s outside of us, it’s not our responsibility. It’s just something that we have to deal with. Guys, money is precious. It is like a receipt. Money is a receipt for the value that you personally create for other people. It is a holding place for that value that you exchange with other people. It’s really a representation of your personal worth as represented by the economic value you bring to the company you work for, the businesses that you manage, and the customers that you support. I want you guys to be in such high regard for the money that you have that you will be a steward over it and recognize it as something that must be managed really well, that is precious.

Something you would like a really nice car, a really nice diamond ring, or a Mickey Mantle baseball card. I came across this company called BC Vintage who offers these really interesting collectibles. These things that are considered rare and precious are often taken very good care of. Just to think of your monetary resource like that. It is so tremendously important that we manage this resource well. In fact, here are some statistics from the American Bar Association regarding the reasons people say that they are getting divorced or why they’re considering divorce.

The bar says 89% of all divorces can be traced to quarrels and accusations over money. Others have estimated that 75% of all divorces result from clashes over finances. Some professional counselors indicate that 4 out of 5 families are strapped with serious money problems. I would suggest it’s not so much money problems, but the ability to communicate effectively about money, to have an open dialogue with your spouse about what it is you care about in life and what it is they care about in life and what it is that creates unity among the two of you about what you both value in life.

Of course, yes, you can have your fun money, and yes, your spouse can have their fun money, but you need to have some joint values there so that the money that comes in from maybe both work, different businesses, maybe you work in the same business, maybe like my family. I do the breadwinning and my wife manages the household as the homemaker and she chooses that and loves that. We need to unify our financial lives in such a way that we have clarity of the vision for our future.

You may have a vision of a beautiful retirement where you stop working at some point, you’re able to do certain trips. Maybe you live retired today like I prefer to do. I try to live in a mindset of retirement today where I do activities that I enjoy, and that my spouse enjoys. We take trips on a fairly regular basis. We do weekend getaways together to bond our marriage together. We do things with our family at least once a year, like our entire family, like our young kids. We do some fairly big trips for ten days to two weeks.

We have found personally that in our lives as we do those things today, we don’t have to wait until one day, someday. We can enjoy some of our financial resources now while also preparing for the future, helping our kids with college, and helping our kids get through our religious life. Our kids do missions if they want to. They’ll go do an 18-month or 24-month full-time missionary service to go preach the gospel. We help finance that. It’s out of our pocket. It’s not covered by our church. It’s actually out of our pocket and gifts from our family who support us.

There are things that are really important to my wife and I that we give priority to because we have an open dialogue about money. In fact, it’s a common practice to do what’s called a family executive council, particularly a husband and a wife. Similar to what you would do in a business. Where like the chief executive officer, the chief financial officer, and the chief marketing officer, they all get together and talk about the direction of the company is what its vision is. What they can do in the current year and then back that out into the current quarter and then back that out to the current week.

That can help move the needle about what that business’s purpose is. You and your family and your spouse, do you two have a clear purpose? Are you having conversations to create accountability around that purpose? Encourage you to do that, guys. Strongly encourage you to have a, you might call it a marriage mastermind rather than that family executive council. It’s like the same concept where the two of you get together for half an hour to an hour, at least once a week. Sit down and talk about what the week has coming up so that you’re both on the same page.

About the calendar and maybe reflect on the prior week and what was accomplished and what could have been done better. Where you guys may have had some miscommunications and could improve. Of course, as you have your marriage mastermind, you can then expand the conversation to a family meeting with your children. Bring them inappropriately into the conversation about what the direction of the family is. Get their insights and guidance in terms of what they want to do.

12 Principles For Financial Success

Family activities to make sure everyone’s aligned. Have difficult conversations from time to time with somebody who may be meeting the family’s expectations. Really have a sound, sure family life, which then can translate into the financial life. I want to share a couple of the things from the principles taught by Mr. Ashton. He says this, “May I at this time hasten to emphasize the fact that these marriage tragedies are not caused simply by lack of money, but rather by the mismanagement of personal finances.

The prospective spouse is concerned ourselves not with the amount of their spouse’s income, but rather with how their spouse can manage that income. Live on less than what they’re making.” This is a skill to track what’s coming in, build some surplus cash, be mindful about what you’re willing to spend because if you want to retire, you have to set finances aside. You have to start to make investments with those finances, buy assets that can create equity and have capital gains, and also have cash flows. Here are the principles, and I’ve reiterated this and reiterated this. This is a millennia, thousands of years old principle.

Number one, pay an honest tithing and give 10% of your money, give back 10% of the resources that you have in your life to some cause. If you’re a church-going person, give 10% to your church. If you believe in what that church is about and what it’s up to, financially support it, and help the cause that you believe in move forward. Perhaps you have multiple causes that you believe in.

Maybe it’s an association within your industry you want to support. Maybe there’s a nonprofit that does some amazing things like provide clean water in Africa. I’ve donated to places that offer building orphanages and education centers for developing countries. 10% or more of your finances given as a tithe to those who are in need and causes that you believe in.

Number two, learn to manage money before it manages you. This is some of the work that I do. Hopefully some of the resources that I’m sharing with you, these episodes are inspiring you to actually take action. This must be practical, guys. It’s not just nice to hear about it. You have to take action. If you’re someone yet who hasn’t taken action and wants to have a conversation, you can do that on my website. Go find the link that allows you to schedule with me and let’s do some time to analyze what’s going on. Let’s do that. If you cannot find it for some reason, leave a comment on the podcast. Go to my Contact Me page on the website. I want to help you guys. It’s got to be practical.

Learn to manage money before it manages you.

Number three, learn self-discipline and self-restraint in money matters. There has to be some discipline. You have to be willing to say no to things. We have to get really good at saying no because that empowers our yeses. Saying no empowers our yes so that it’s a more appropriate thing. It’s got a stronger positive impact on our life when we say yes to something because we’ve thought it through. We’ve given some real discussion to it. It made sure it aligns with our values and the priorities of our life.

Number four, use a spending plan. Identify what your expenditures have been in the past year. If you haven’t got a full year, just do the past three months. Get the average and then plan your future spending. This month, next month, based on that average, and then track against that average. I’ve got a tracking tool you can go download and make sure you’re building some surplus. You’ve got to build some surplus. My encouragement along with having a spending plan is always and the first thing you do is giving an honest eye.

The second thing is paying yourself. You need to keep at least 10% if not 20%. Plan on 10%, 20% for yourself, for future things, for big purchases, for trips, for retirement. The rest of the 70% is the money that’s available to enjoy your lifestyle. 10%, 20%, 70%. That’s the pattern. 10%, 20%, 70%. Now the next piece. Teach family members early the importance of working and earning. This is where all the family. That’s that by the sweat of your face shall you eat bread all the days of your life. There is something valuable and powerful about work.

Learning how money is created through value exchange by giving something of value, solving a problem. Maybe your kids need to go wash somebody’s car, shovel some snow, rake some leaves, cut some grass, or pull some weeds. Like whatever those things are, your kids you need to go do that. If you guys haven’t learned that skill yet, like really recognize the value you’re providing to your employers and your customers as business owners. They’re paying you not for time, but for the value you provide. Teach our family members the importance of working and earning.

Number six, teach children to make money decisions in keeping with their capacity to comprehend. At different stages of life, when I was young, I’ve shared this story many times, I had a little bank, that had three compartments, this was this cardboard box. Spend, save, give. These three components, 10%, 20%, 70%. When I was young, it was more like 10%, 50%, 40%. 50% went to long-term things like buying a bike, preparing to do my own missionary service, paying for college, buying a car, all those longer-term things. I would take the money that was in that little bank and I would take the $10 bill.

My parents would break it up into 10 $1 bills. $1 goes into the tithing, $5 goes into the savings, $4 goes into my spending. I knew what I had. We have to learn the discipline that our kids’ age-appropriate capacity. In our current life, my wife and I, often use tickets. We have this tool called the DoDots board and the kids, they have level-one activities, which are just responsibilities. Clean up your room, tidy your bed, like make your bed, tidy your space. Do your basic household responsibilities like setting the table, clearing the dishes, loading the dishwasher, unloading the dishwasher, and taking care of the animals. Those are what we call level-one activities. Those are not paid. Those are just things we do for the family.

Level two activities are income-generating activities, something extra. They get tickets and those tickets are worth dollars. They accrue these tickets and then the tickets can be transferred into actual dollars. They can be transferred into going to the store to buy something that they have been looking forward to. It can be transferred into an experience with mom or dad. Again, age appropriate using something that the kids can understand.

Number seven, teach each family member to contribute to the total family welfare. Allow each other to support each other. My daughter’s about to go on this mission. We’re going to have our kids add some of their own money to this mission fund. They get to contribute to the welfare of the family. When we do trips, we allow the kids to contribute to the pot of money. We even keep a jar that’s got coins and dollars in it. The kids add some of their own money to this fund to go on a trip. One year we did this. We had a big jar. On the first day of our trip, we took it to the bank. We converted it into actual dollars.

The dollars then were split up among the kids so they could go buy souvenirs. They all had buy-in to this experience as a family because they were allowed to contribute to the total family welfare. It’s good and it’s okay to have open dialogue. Let the kids know what the bills cost. Age-appropriate teens can come in and sit down with you and you go through paying the bills. You look at your bank account, you open up the bill that’s due, you set up the payment through your bill pay system or maybe you write the check if you’re still old school.

I do that every once in a while. Let the kids know how to do the money management and contribute. Maybe they even need to do some jobs around the house to their extracurricular activities for school. Let them pay for part of that. Let them know that it’s not just you giving to them, but giving the right and responsibility to go earn something so that they have buy-in to their own experience in their extracurriculars.

Number eight, make education a continuing process. Complete as much formal full-time education as possible, including trade schools and apprentice programs. Again, this is coming back from the ‘70s, and early ‘80s. This is still highly applicable. Our college system is messed up. College isn’t nearly as important as it once was because there’s so much education available for free online.

Go learn a valuable skill to solve an important problem. The bigger the problem, the bigger the paycheck. Trade schools are still way in need, like electricians and HVACs, plumbing, yard maintenance, roofing, housing, construction, welding, all these things. It’s super highly valuable. It can be paid hundreds of thousands of dollars without having to go through 20 years of school like doctors.

Go learn a valuable skill to solve an important problem. The bigger the problem, the bigger the paycheck.

Number nine, work toward home ownership. It’s very expensive now to buy a home. We have to get creative about that. Additional dwelling units on our own land. We might build something that we can offer to our children. Maybe we help them use some of the equity in our house to help them get into a house. In today’s market, people are less interested in houses, I think, but I think there’s still value in owning a home and having something that keeps you engaged and feeling like you have a piece that you can call your own.

Number 10, appropriately involve yourself in an insurance program. I’m a big believer in protections, appropriate protections. We need to have auto insurance, homeowners, and an umbrella. We need to have business insurance. We need to have life insurance in two kinds, term life for the what-if scenario of early death and whole life as a cash buildup vehicle that’s tax-free and that allows for easy access.

We need to have a disability insurance plan. We need to have something that helps with long-term care for our future needs because over 70% of 65-plus-year-olds are going to need skilled nursing care, for Alzheimer’s, mental breakdowns, and body breakdowns. I’m starting to see it in my parents from their early 70s to mid-70s. This stuff’s happening. We need to have that stuff in place as early as we can. Again, appropriately, we need to find out what the maximum coverages are we can get and then decide how much we’re both willing and able to pay for.

We need to educate ourselves. Insurance isn’t the necessary evil. It’s just necessary. It’s good. It’s something that allows us to transfer our risk to somebody else, another institution that’s highly capable of handling that risk. We’re only on the hook for a few thousand, whereas the insurance company would be on the hook for tens of thousands to hundreds of thousands. It’s very important we have an appropriate insurance plan. Including that, estate planning, business entities, and things of that nature too.

Now, number eleven, understand the influence of external forces on family finances and investments. Inflation continues to offset major portions of average wages. It doesn’t seem that wages are keeping up with the cost of inflation. We have to be even more careful with how we spend our lifestyle. There are so many billions of dollars telling us to give up every dollar we have to spend it on everything else. A larger paycheck may not mean more purchasing power and should not be an excuse for extravagant purchases and additional debt. This is lifestyle creep that Mr. Ashton was talking about 40 years ago. That existed then, it exists now.

Number 12, appropriately involve yourself in a food storage and emergency preparedness program. This is, I think, one of the least thought of things in personal finance. We think about saving dollars, but we don’t often think about saving food, water, and fuel on hand at our homes. If you have animals and you are without power for a few days, maybe even a couple of weeks, like in North Carolina, I’ve got one of my administrative assistants who lives there. Their family is in the path of Hurricane Helene. A 500-year storm is what it’s been declared.

We think about saving dollars, but we don’t often think about saving food, water, and fuel on hand at our homes.

It was devastating. If you don’t have some food and some water and some propane you can cook food, like in storage tanks outside of your home, if you don’t have a grill, if you don’t have extra bags of animal, food, if you don’t have the necessities of life, you might have a really difficult time surviving one of those situations. It’s not uncommon anymore for natural disasters to kick off our power for more than a few days.

Get some basic food storage in place. Get about three months as a starting place, as a goal, so that you have the ability to deal with a natural disaster situation. I live in Utah. We’re on a fault line in Salt Lake City that is expected to have a very major earthquake in the coming years. We are due for a pretty substantial earthquake, according to the historical record. I personally have for my family at least three months on hand. I have a 250-gallon water tank in my garage that’s got spigots on it that allow for that water to be flowed out.

A Good Financial Life Brings The Greatest Happiness

Of course, we’ve got propane on hand and we’ve got a solar power system with battery backup. When my neighbors are without power, I actually have power and can generate power during the day. Again, we want to do so appropriately. We don’t want to just go get into a bunch of debt to do that. We want to do so carefully. We’ll wrap with that. Money management is really important. The current day record tells us that encourage you guys to have an open dialogue with your spouse. I want you guys not just to have good financial lives, but more importantly, a good personal life, marriage, and family because that’s what brings us the greatest happiness in life.

Being with people we love and care about and enjoy being with. I want you to have good healthy ways you can have the conversation with your spouse. I want you to be in alignment with your spouse. I want you to have the resources that money can be something fun, easy, and interesting. It can be something enjoyable. I want you guys to just have a beautiful life.

I hope you’re enjoying this. If you are, please take a moment to go like, and subscribe to the podcast on the YouTube page. Make some comments for me. Let’s create some dialogue there. Share this with your friends and loved ones. Leave a review for me. That’s a huge value add to my life to know that you are appreciating what this podcast is about. It also helps others find the podcast more easily. Love you guys and we’ll see you in the next episode.

 

Episode Resources

• One for the Money
• Wealth Acceleration Podcast YouTube Page