Scary truth: I am in charge of our family’s finances.
Ryan is almost as bad as I am when it comes to money. His favorite refrain is, “You know we’ve spent a lot more on a lot dumber stuff than this.” He’s a big tipper. His impulse is to put our comfort and pleasure before responsibility, not because he’s irresponsible, but because he likes to enjoy life. This is one of the things I love most about him. Don’t get me wrong; he’s not a big spender. That would be my department. But he does refuse to stress out about spending money if it’s going to make us happy.
That’s probably why we are what Ryan likes to call “lifestyle rich.” We have a wonderful life; we just don’t have a lot of money in the bank. I once told my father-in-law that my goal was to get us back to zero. “Shouldn’t the goal be to get beyond zero?” he asked.
The truth is we are a generation who, unlike our own parents, are comfortable with debt. We carry big mortgages, then leverage our homes when the equity goes up. We have credit cards, and then we have more credit cards when it’s time to transfer a high balance or look for a lower interest rate. We have electronic payment apps like Venmo and PayPal that make spending so easy that it almost doesn’t feel like spending at all. We have Amazon accounts where purchases can be made with one click. We finance everything from mattresses and appliances to shoes. We subscribe to services that debit us monthly, whether it’s a streaming service, data storage, or online software — spending we’re not even aware of.
A few weeks ago, my friend Nancy invited me to join her book club. Little did I know that a book club is really just a code word for women who want an excuse to get together and get drunk in the middle of the week, but still. I took this whole book club thing very seriously. I bought the book and read the first six chapters that we were supposed to read.
The book was “Smart Women Finish Rich” by David Bach. I’m pretty sure it was a message delivered to me by divine intervention. It will probably save my life.
The book teaches women how to take control of their financial future. Bach asserts that many women have “Cinderella syndrome” and assume someone else is going to take care of it for them.
Even though I run our family finances in terms of managing all our accounts, I haven’t done jack when it comes to investments and planning for the long term. I always had a “I’ll cross that bridge when I come to it,” mentality.
Then I started reading stories about Bach’s clients. Like this one woman who’d been married to a wealthy attorney who made seven figures a year. The couple lived in a big house and had all the luxuries her husband’s generous salary afforded them. When the husband died suddenly, the woman, now widowed, realized she had no knowledge of their family finances. She learned that her husband had no will, no life insurance, and that they’d been so leveraged that they had more debt than capital. In essence, they had less than nothing. It was precisely the whole idea of “getting back to zero” that I’d talked to my father-in-law about.
There are other points Bach raises about what knowledge I have about our accounts. Do I know the terms of Ryan’s retirement account? Does he have life insurance? What are the terms of our homeowner’s insurance? I was astounded to learn these were all questions I couldn’t answer.
The biggest eye-opener for me, though, was about goal-setting: Where would I like to be in three years? Bach asserts the more detailed you are with your goals, the more likely they are to be achieved. I had a very specific number in mind for how much money I would like to make because we are in the midst of planning an extensive remodel for the A-frame.
The strangest thing happened; as soon as I started thinking about financial planning and how much money I needed, opportunities began to appear. These are jobs and projects I could have never seen coming, on topics I never would have imagined.
In yoga we talk a lot about setting intentions. We contemplate the idea of energy and our ability to channel it in different ways. As a creative person, my experience with my work is that it seems to come through me, not from me. The only way for me to truly produce something inspired is to allow that to happen, which requires turning off the part of my brain that tries to control everything or even destroy it, with self-doubt, fear, and straight-up laziness.
The idea that I could take control of my finances and actually create change that would increase my earning potential seemed revolutionary. But it’s not. It’s actually really quite simple.
The fact is that many people we consider to be “wealthy” have no money at all when you look at the reality of their finances. My accountant once told me that my family is worth more on paper than some of his so-called rich clients because our debt-to-income ratio isn’t that much. I never forgot that.
Here’s the real kicker, though: The key to acquiring wealth is to reduce spending.
I have to be honest: It does sort of feel like going on a diet to consider things like cutting up my credit cards and only using cash, taking a day to think about any purchases over 100 dollars, and drinking coffee at home instead of buying lattes. But the idea of one day having enough money saved to travel with my family might actually be more important than buying yet another pair of shoes.
The Princess is having hot flashes. Email your love to alisonmargo@gmail.com.