I'm typically late to all the bandwagons, but I recently started listening to Ramit Sethi's I Will Teach you to be Rich podcast and identifying myself as super late to the game seemed worth it if I also get to discuss some interesting parallels I noticed as I listened to people's stories. As expected, his show does not disappoint bringing forth raw and honest conversations about the underlying fears, challenges, and deep-seated beliefs individuals hold that permeate into other aspects of their lives and how it affects their romantic relationships and why we should be talking about money early and often so everyone knows where they stand and where they're trying to go, which many times has nothing to do with money itself, but the many layers underneath the feelings that money brings up.
One interesting theme I noted across different episodes included individuals who were typically "in charge" of money describing their experience or feelings as "lonely." There seemed to be some general disagreements about financial philosophies and the technicalities of who was spending what and how the other disagreed, but at the core, loneliness seemed to be the core driving emotion that led to other behaviors and attitudes that were causing tension in the relationship.
I then started thinking more broadly about the dichotomy of personal finances, as with so many things in life that aren't clear cut but rather filled of layers upon layers of other gray areas. Personal finance and money in general can be empowering, freeing, and overall, gaining control of your finances can prepare you to be in better, safer situations dictating what you want your life to look like and what your values are and helping those around you while it can also be lonely, confusing, and anxiety-inducing. Whether you're in a relationship or on your own, sitting down with individual or communal goals can be scary and realizing that watching all the videos about personal finance and investing will still not answer the deeply personal questions that no one can answer but you such as: What are my goals? What do I value? What do I want my life to look like now and in the future and how can I set up systems and habits that will help get me there?
Being "on your own," that is to say, you are solely reliant on your own income for fixed and variable expenses such as housing, transportation, etc. means the full weight of financial decisions fall on your shoulders while being in a relationship means having those difficult and uncomfortable conversations with your partner and figuring out systems that work for both of you, but also deeper discussions about values and where you're trying to go as a unit. Nothing is easy, so choose your hard wisely because these are scary things and scary questions!
But it all starts with intention and slowly/consistently shifting your mindset from, "this is hard and lonely" to "this will be empowering and will help me/us get to where we want to go." Start with the easy and learn as you go: budget, budget, budget! Always start with understanding where you are and work your way up to bigger topics as things become more manageable and less theorical.
Here are a few tips to get started if it all feels too overwhelming. Start with numbers that are within your control, the below is a simple template that can get your started to keep track of incoming funds and where they are and need to be allocated:
Once you feel comfortable tracking your fixed and variable expenses and seeing how much your expected differs from actual month over month, you can see where you can make some changes. Do you need to increase your income and focus on looking for another job, a pay increase at your current job or incremental income from a part time or side hustle? Are you overspending in certain categories that can be decreased and cutting into your cash flow every month? Should you put most of your focus on paying something off with high interest to free up that cash each month? Having this high level view each month will allow you to pivot as needed and get a better sense of where you are and how you're progressing.
A good rule of thumb for overall expenses is as follows: 50-60% on fixed costs (using the above template, this can be inclusive of things like groceries and gas since those are essentials although they can vary month over month), 5-10% on savings (this can include a sinking fund to prepare for short and long term goals), 5-10% on investments (this can include employer based retirement plans), and finally, 20-35% for fun money!
Whether you're tackling this on your own or with others, starting with the fundamentals, being open, honest, non-judgmental and compassionate, holding space and grace for whatever feelings the process may bring up are all just as important as just looking at the numbers, it's usually never just about the numbers but about the story they tell and the (sometimes distorted) story you're telling yourself. Remember, being honest AND kind are not mutually exclusive concepts.
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