Time changes everything, and looking back on this year, I hope we all found some positive ways to change. I know I did. One in particular… the clean slate, the chance to start over, because of the events surrounding us. I am literally excited about the opportunity we’ve all been given, and I see it as my chance to be an advocate, to encourage more open communication and changes in behavior when it comes to… BUDGETING!
Yes, budgeting…stop squirming…keep reading. Why do we dread this word so much? Not a numbers person? Not comfortable sharing? Why?
Do you know how many couples don’t discuss this very important topic? I worry about that a lot. Holding things in, especially when it comes to money, can add stress to our relationships. So why do we do it? Perhaps we don’t want to be told what to do, or we don’t want to start an argument. Maybe we’re embarrassed, but why?
I mean, I get it. You’re making yourself vulnerable. It’s uncomfortable. But how can you reach any goal if you don’t know where you are or where you’re going? And what’s your plan if there’s an emergency, even worse, another pandemic?
Now I’m not going to tell you what to do. I’m not going to tell you you’re spending too much on one thing or another. My job as a financial advisor is to help you think about your relationship with money. How do you feel about your spending, how do you communicate your goals, and what’s your backup plan. You see if we can approach our spending habits honestly, we may be able to open up with those we love, obtain our goals a little easier, and have a little less stress in our relationships.
I’ve always been a believer in having an open dialogue about the importance of money, about bills and spending, and knowing the difference between essential and non-essential expenses. Essential expenses take care of daily living and maintain the lifestyle you desire, such as cost of your home, food, clothing, transportation, and healthcare. Non-essential expenses are those you could have fun with or use to plan for the future. These are the things you CHOOSE to spend your money on, like travel, hobbies, dining out, streaming TV, or your retirement and legacy.
You see, I learned a thing or two from my Granny and Papa at about the age of 10. At the first of each month, they would sit down at the kitchen table, pull out their checkbook and calculator and pay bills together. They balanced the checkbook to their monthly bank statement, added in their income and subtracted out their expenses. When they were finished, they knew exactly how much they had left over for fun. And I remember “fun” was often $5 for us kids and a walk to Winn’s, the local “five & dime” in Refugio, TX, where we could buy anything we wanted.
Today, I continue to carry on this legacy with my granddaughter, Lilly. She gets 3 coins per week, because she’s 3 and learning to count. Then we put the coins in 3 different piggy banks for her 3 different needs. First is her “Vacation Souvenir Bank,” (long term goals). Then her “Special Toy Bank,” (intermediate goals), and finally her “Candy Bank,” or (fun bank), which she can use to buy candy at Target (since there are no Winn’s, but you get the gist.)
To some it may seem early, but I believe this will make a difference in how she approaches her finances as she gets older. She won’t be afraid to talk about money, she’ll learn how to set goals, and hopefully she will continue this tradition with her children and grandchildren.
So, think about how you spend and save. How you can reward yourself now and in the future? And, maybe more importantly, what legacy you want to leave behind? Then you can answer the question…What’s in Your Piggy Bank?
Securities and investment advisory services offered through Royal Alliance Associates, Inc. member FINRA/SIPC. Royal Alliance Associates, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Royal Alliance Associates, Inc. 3522 Paesanos Pkwy, Suite 100, San Antonio, TX 78231, (210) 998-5000. 21830875-20201016