Emergency! Is Your Money (and Your Marriage) Ready?

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Post written by money and career columnist Dustin Riechmann of Engaged Marriage.

What stands between your family and major financial trouble?

Hopefully, it’s not just a credit card or a home equity line.

In many cases, married couples have only a small cushion (if there’s a cushion at all) to carry their family in the event of a loss of income or a major expense.

Once you’ve taken care of any nasty consumer debt, it’s time to prepare for those inevitable rocky times that lay ahead. After you get an emergency fund in place, you’ll be ready to face those costly home repairs, unexpected medical bills and periods of unemployment.

You won’t like it when an emergency strikes, but you’ll be prepared and ready to cover the financial impacts without resorting to debt. Let’s build a full emergency fund!

How Much Should We Save?

As a general rule, most families should have approximately 3-6 months worth of expenses in an emergency fund. It’s important to understand that this not 3-6 months of income, and it’s not inclusive of all the money you spend in a typical, non-emergency month.

To calculate an appropriate amount, go through your budget and decide on a line-by-line basis whether each expense is something that you’d need to cover if you were faced with unemployment. Once you have that monthly “bare-bones budget” amount, multiply it by a factor of 3-6 and you have your goal.

The 3-6 month time-frame will allow most people to regain meaningful employment if they are faced with a job loss. While unemployment isn’t the only potential emergency out there, it’s certainly a relevant threat for most people and this amount of savings will also cover most reasonable “expense” emergencies that you may face.

So, should you save 3 months, 6 months or something in between? Well, your personal amount should be based on your exposure to risk as well as your risk tolerance.

If you have two stable jobs and a fairly “calm” life with little volatility in your expenses, then 3 months is probably sufficient as long as that amount makes you comfortable. On the other hand, if you are a one-income family with lots of little kids around and you feel like trouble is always lurking, you should shoot for 6 months of expenses. At the end of the day, it’s a judgment call.

Where Should We Save It?

While I recommend that a small portion of your emergency fund (around $1,000) should be kept close to home at a local bank for super-fast access, most of your fund should be allowed to work a little harder for you. In most cases, we’re talking about many thousands of dollars (often tens of thousands), and there is decent money to be made through interest earnings.

Just to be clear, you should not be investing this money and putting it in any real risk. Your emergency fund is effectively an insurance policy you’re keeping between yourself and financial ruin. There is certainly a place for investing, but we will not be using our emergency fund for those efforts.

That said, there are options out there that pay better rates than your local bank, offer reasonably fast access to your money and keep it safe. My personal favorite is an ING Direct Savings Account. ING is a great company who pays strong, market interest rates on your money while keeping it FDIC insured and very accessible.  Do a little research and find the best solution for your family.

When Should We Use It & What Happens If We Do?

Once you have a nice emergency fund stashed away, you may wonder just when you are supposed to take money out of it. Well, you don’t want to tap into your emergency money unless you have an actual emergency that you couldn’t foresee.

For example, regular home maintenance should be part of your budget and not something you need to take from your emergency fund to pay for. And you know your car insurance is due each year, so that’s not a good use of these funds. On the other hand, you can’t plan for a broken leg or a job loss, so when you have a true emergency, tap into your account and feel good that you are prepared.

Once you get your full emergency fund in place, you’ll probably want to move onto investing, paying off your mortgage and meeting some other financial goals. If (or when) you do encounter trouble and you have to take money from your account, you’ll need to pause these other goals temporarily and redirect your “extra” money each month back into building your emergency fund until it’s back to your comfortable level.

Without question, this full emergency fund requires a lot of money to complete, but if you keep the same intensity that took you through paying off your debts and redirect that “debt snowball” money each month to your savings, you can absolutely do this.

Once we completed this step, my wife and I felt a true sense of financial peace in our family. We’ve needed it several times and, although spending lots of unexpected money is never fun, it’s great to know that you are financially ready to face most of the nasty stuff that life will throw your way!

Bring peace to your marriage by building your own full emergency fund.

(photo source)

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Let’s Talk About (Money), Baby!

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Can you think of anything more exciting to do with your spouse than talk about your family finances?

Um, I sure hope so!

But that doesn’t mean that it’s not a vitally important and incredibly rewarding practice.  I know you’re busy, and probably particularly so during this back-to-school season, but that’s no excuse for poor communication about money.

In fact, that’s precisely the reason why you need to have regular meetings with your spouse to talk shop about your finances.

How regularly?

If you’re actively working to pay off your debt or aggressively meet some other financial goal, you should aim for a weekly sit-down together.  This is also appropriate if you’re new to the practice or if you’ve only recently created your first budget and are working out the kinks.

If you’re a bit more seasoned and your money situation doesn’t tend to change very often, then a monthly chat should be sufficient.  In all cases, you really shouldn’t go more than a month without a concerted discussion about your money goals and plans.

Still not convinced?

3 Reasons You Need a Regular Money Meeting in Your Marriage

1. Take the Time to See Where You Are

If your household is anything like ours, it’s really easy to go weeks at a time simply keeping up with the kids’ activities and squeezing in a date night or two with my wife.  We’re all busy, and that’s exactly why you need this special time to talk about money.

If you don’t set the time aside, you’ll wake up one day and realize you’re not sure what happened to your money over the last year (or five).  Simply spending 30 minutes with your spouse focused on these issues can make all the difference.

2. Set and Reset Your Goals

It’s incredibly difficult to hit a target when you don’t know what you’re aiming for, and that’s exactly what too many couples do with their finances.  When you establish regular communication around this topic, it allows you to set SMART goals and develop a plan to meet them.

This is also a perfect time to readjust your goals and make plans for upcoming financial events.  That next car purchase or next year’s trip to Disney will be much less disruptive to your finances if you start talking about them months in advance.

And this provides an excellent opportunity to open up about any money-related issues that have been on your mind.  If you feel like the restaurant bills are getting out of control or there needs to be more money budgeted for date nights, your money meeting is a safe and convenient time to discuss changes to your budget.

3. Pinky Swear (Accountability)

If there’s one thing that regularly talking to your husband or wife about money will do for you personally, it’s build in a sense of real accountability for your spending choices.  When day runs into day, week into week, it’s really easy to let your budget slide by the wayside and ease into bad habits.

In more serious circumstances, spouses can hold financial secrets and even lead a double life when it comes to money (think separate bank accounts and undisclosed credit cards).  This “financial infidelity” can tear apart a marriage, and this often occurs after a long period of non-communication around money.  An ounce of prevention in the form of regular, open talks can certainly be worth a pound of financial peace and transparency in this case.

I hope you can see the value in a regular money meeting with your spouse.  Sure, it’s not the most exciting topic, but it’s one of the most important to your marriage and family life.

Is this something you do in your marriage?  Why or why not?

(photo source)

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Plan Your Meals and Feed Your Family in a Whole New Way

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Post written by money and career columnist Dustin Riechmann of Engaged Marriage.

There is incredible power in the simple act of planning our family’s meals.

On the surface, it may seem like meal planning is restrictive or even boring.  However, like budgeting, it can actually be quite freeing when it’s done correctly and with a spirit of improving our marriage and family life.

Simply knowing what you’re going to eat at least a day in advance can have a major impact in your day-to-day life and your long-term success.

Let’s take a look at three key areas that will improve when you adopt meal planning as part of your busy life.

3 Reasons You Need to Plan Your Meals

1. Money

If you’re anything like most families (including ours until last year), you have a LOT of room for improvement financially in the food department.  In our case, we used to eat carryout restaurant food much too often, plus we wasted groceries on a regular basis.

We shopped for what we thought we needed during each grocery store trip, but without a plan we inevitably found ourselves opting for the “convenience” of takeout/delivery and (at the same time) letting groceries expire before we actually used them all up.

Plus, our grocery shopping trips weren’t organized to take advantage of sales and store discounts since there’s no way to know this information without some foresight, planning and guidance from a service that tracks it.

When we started planning our meals a week in advance, we saved an average of $317 per month on our food bill!  This may seem extreme, but I challenge you to take a hard look at your budget (you do have a budget, don’t you?) and see if there isn’t some major fat to be trimmed.

2. Health

Speaking of trimming fat,many of us could certainly use some help in eating healthier and in more reasonable proportions.  Again, meal planning can be a real help in this area.

When we sit down with our spouse and plan out a week of meals, we inevitably make better food choices than when we’re faced with last-minute decisions with a hungry stomach and cranky kids to deal with.  Once the food is purchased and the meal is set, it’s much easier to actually follow-through and eat well consistently.

Meal planning also allows us to avoid most last minute dinner “emergencies,” which means there’s no reason to run through McDonald’s or order pizza because “we don’t have anything to cook.”  Simply planning ahead for 5 nutritious, properly portioned dinners each week will make most families much more healthy.

3. Quality Time

A generation ago, there used to be a standing, unbreakable rule in most families that dinner time was spent together.  Unfortunately, with the busyness of our lives today, this regular quality time has been lost.

While meal planning alone won’t reschedule our priorities, it can certainly be a big step in right direction.  Rather than each family member doing their own thing, dinner planning encourages a family to eat the same meal, at the same time.  When Mom has dinner scheduled for 6:00 p.m., Dad knows he can’t just hit the drive-through on the way home.

Like budgeting, meal planning won’t force a family to change their behaviors and commit to better priorities, but it provides a wonderful framework to make it happen.

Meal Planning Services

There are many great meal planning options online that can cater to your particular needs.  In our house, we actually use a combination of two different services.

We love E-Mealz for planning our dinners and maximizing the savings on our grocery bill.  We also use the full custom nutrition calendar through our membership with Team Beachbody, which makes it easy to plan every meal of the day and balance our food choices with our exercise plans for a complete picture.

Regardless of whether you choose an inexpensive service like these or an old-fashioned pen and paper, you should give meal planning a try.  Do it for a week and see if you feel the value it adds to your marriage and family life are worth the “trouble” of planning ahead to save money, shrink your waistline and spend more quality time together as a family.

I think you’ll wonder how you ever managed your household without it.

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Is a Gym Membership a Good Investment in Your Marriage?

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Fitness and Marriage

Post written by money and career columnist Dustin Riechmann of Engaged Marriage.

It’s that time of the year again.

Back when I used to frequent a gym, the first six weeks or so after the New Year always meant the addition of a lot “resolutionists” as we liked to call them.  The place would be packed, but by Valentine’s Day most of these folks would quit and the regulars would have the gym to ourselves again.

Of course, there have also been years where I was a resolutionist myself.

However, since my college days, I have always had an active gym membership (until last year as I’ll explain later).

This includes the years that we were struggling financially and getting into debt.  And it includes the three and a half years we spent intensely working to pay off $54,500 in debt.

I always believed that keeping a gym membership was a wise investment in my own well-being and something that was important for our marriage.  Never mind the fact that I didn’t always use it.

Fitness and Marriage

Does leading a healthy, fit lifestyle improve your marriage and family life?

I think the answer to this question is a resounding YES, and I know Corey agrees since he told me so in the very first episode of The Fit Marriage Show podcast.  I can say from first-hand experience that I am a better husband and father when I exercise regularly and eat well.  And I have heard the same from many, many busy married couples since starting Fit Marriage.

There are many reasons for this link between being active and being a better spouse.  There are the physical benefits of exercise, which include reduced stress, less injuries and improved energy levels.  These changes simply make us happier and more pleasant to be around.

While most of us associate fitness with physical benefits and looking good, the biggest impact on your marriage likely comes from between your ears.  It’s the improvement in self-confidence and self-esteem that can really fuel renewed passion in your relationship with your spouse.

Simply put: when you feel good, you’re a better husband or wife.

And this carries over into every aspect of your married life.  When you are fit and feeling fantastic, you can expect a better sex life, more patience with your spouse and children, a clearer head to deal with financial issues, improved productivity to get your work done more efficiently and free up more time for recreation, and the list literally goes on and on.

If you haven’t experienced what it feels like to be fit, healthy and active in a while, you may think there’s some exaggeration represented by these claims.  While I don’t believe this is the case, I think everyone can agree that being fit is a good thing, and it can only enhance your marriage.

But at what cost?

Gyms Are Expensive

In the United States, the average gym membership costs almost $43 per month, plus sign-up fees.

No matter how you look at it, over $500 per year is a lot of money.  And if both spouses are members, you might be looking at a cool grand in fees just for access to the facility.  If you need some help with a training plan, you can expect to pay significantly more for the services of a personal trainer.

So, is this a wise investment?

As evidenced by my own story, I think it’s clear that I believe it is if you don’t have other options (and you are actually using the place).

It’s a cliche for a reason: you are nothing without your good health.  And I believe that enhancing your level of fitness directly improves your quality of life and the quality of your marriage.

So if you were faced with a choice between paying $1,000 per year to exercise or keeping the money and remaining sedentary, I would advocate paying the money every time.

You Don’t Need a Gym to Get Fit

Here’s the great news, though…you can save your money and achieve your fitness goals!

There are many exercise options available to you that don’t require an expensive monthly fee.  If you live in a temperate environment, this could be as simple as walking, jogging or cycling outside regularly.

For those of us that live in cold places, choose to work out when it’s dark, or need to be at home with our kids, it might be best to consider an at-home fitness program.  This is exactly the situation I found myself in last year, and it was the start of quite a journey for me.

I would encourage you to go read my own fitness story since I bet many of you can relate.  I’m really proud of the progress I’ve made since I quit going to the gym.

While you are there, you will learn all the details of the Thrive90 Fitness program.  This at-home, video-based fitness system was literally designed by and for busy married couples with the goal of providing a program that gets awesome results while saving you both money and time.

Whether you choose a gym, Thrive90 Fitness or another approach, I hope that you’ll take action to improve your fitness level today.  I promise you that you won’t regret it, and I’m confident that your investment will pay many wonderful dividends in your marriage for years to come.

How will you invest in your marriage through fitness?

(photo source)

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Budget Stretching Secrets from a Frugalista Mom

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I have often been called Thrifty, Frugal and now the best term yet Frugalista!  I don’t mind these terms, in fact it is almost a little like a badge of honor.  I think it is in my blood (German I am!) to be a smart shopper, always looking for the deal.  It definitely came to surface during my years as a single mom – stretching those pennies as far as they could go and then some.

When I knew I needed to find a way to bring in some extra money I started a little used book business in my hall closet. I would buy used books at thrift stores and then resell them on half.com and eBay.  I actually made some money doing this and was able to do some extra things with my kids, like go on vacation.  But that is an entirely different blog post!

I wanted to share with you some of the things I do still today to stretch our family budget and even get things for FREE.  I have a lot and don’t have room to share them all, so I may have to do another post on this at a later date.

Read more »

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168 Hours: Don’t Waste Yours

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When it comes down to it, time is our most valuable currency.

Time is actually much more important than a simple conversion to dollars. While money comes and goes, time only goes. Once you use up an hour of your life watching True Blood or responding to work emails, that hour is never coming back.

It’s simply gone.

It can’t be exchanged for fifty bucks, for a surprise dinner for your wife or a backyard game of catch with your son. It can’t be traded for better fitness, a nice nap or some quality time snuggling on the couch with your husband.

We never know how much time we’ve got over the course of our life, but we do have a pretty good idea that we have 24 hours today. And hopefully another 24 tomorrow.

So, how do you want to spend those next 24 hours?

Be Intentional

The key to being more intentional with our time is actually the same approach that’s needed to be proactive with our finances. It requires getting a solid understanding of how you spend your time now and then planning for how you’d like to spend your time in the future.

You guessed it, Read more »

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Marriage and Money: Do You Have a Plan?

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‘He who fails to plan, plans to fail’, Proverb

When you got married, did you and your spouse sit down and develop a plan for your family finances?

I am a big believer that those who are proactive achieve the most success, and I have experienced this to be true in the area of money and marriage almost without exception.  For the first several years of our marriage, my wife and I basically coasted along and didn’t give much thought to our money.

There was always a little money in the checking account, and we never missed a payment on our rent, cars, student loans or other debt.  The money thing was no big deal.

Well, about five years ago, we woke one day to the glaring realization that we had accumulated a lot of debt along with virtually no savings.  There’s nothing like a double-line on a home pregnancy test to make you quickly reassess where you stand financially.  When we looked under the surface of “everything seems fine,” we received a hefty dose “oh crap, not so much!”

It’s Time for a Plan

For us, that day marked a turning point in our family’s financial condition.  We took an honest assessment of where we stood, held hands and decided it was time for some major changes in the way we handled money.

Over the course of the next three-and-a-half years, we paid off nearly $55,000 to become debt-free in our marriage (other than our home mortgage) for the first time.  There are many reasons why you might want to consider a similar goal, but today’s post is about something much more universal.

You need a plan.

Whether you want to retire at 40 or just keep your car from getting repossessed, your financial situation and, most importantly, your marriage will improve if you develop a plan for your money.  When you tell your money where to go instead of wondering where it went, you take control of your family’s financial success.

The Big Three: How to Make a Money Plan that Works

1. Talk

If you’re single, it’s easy to create a plan and get started immediately.  Well, if you’re reading this, there’s a good chance that you have someone you need to coordinate this thing with.

Typically, one spouse is going to have their “aha” moment first.  It could be an inspiring story you read online, your first bounced check or the 100th call from a bill collector.  Regardless of where the seed gets planted, change is coming.

Well, when you’re married, a financial plan is only as effective as the most reluctant spouse wants it to be.  To get started, you need to discuss just exactly what you hope to accomplish for your marriage and family.

Use some of your Couple Time to ask each other, “What’s our plan all about?”

2. Lock Arms

Once you’ve discussed your goals, it’s time to start taking action.  And the key to effective action when you’re married is a little word with big implications: Unity.

I’m a firm believer that the biggest key to a successful financial game plan is being on the same page before you begin and then making adjustments as you progress to make sure you stay on track with each other.

So what does unity look like?  Well, it depends on your relationship, but how you handle your bank accounts will be a good indication of where you stand.

I have to admit that I used to have a pretty cut-and-dry view on this topic.  However, thanks to you fabulous Simple Marriage readers and our active community back at Engaged Marriage, I have opened my mind.

I invite you to read the most popular post on my site called “Should Married Couples Have Joint or Separate Bank Accounts?” and consider the variety of intelligent (and very passionate!) opinions in the post and comments.  To me, the bottom line is that you need to operate your finances from a central plan, which brings us to the dreaded “B” word.

3. Write It Down

Once you’ve talked it over with your spouse and committed to approach your finances with a unified mindset, you’re ready to physically create your financial plan.  Your plan will likely grow over time and include a variety of short, intermediate and long-term goals.

However, at its core, your plan needs to have a specific map for how you will handle your income and expenses.  And it needs to lay this out before you actually receive your income and then spend it (it is a plan, after all).

You guessed it, the base of any effective money plan is a monthly budget.  I’ve written previously here about the benefits a budget provides for your marriage.  If it’s the key to financial success and it’s great for your relationship, why doesn’t everyone use a budget?

You probably have your own reasons, but I know that we didn’t have a budget for years because we were ignorant about what was happening to our money and we liked it that way!  Another big issue, which actually popped up for us again recently, is the feeling that preparing a budget takes too much time and effort.

Well, trust me when I tell you it doesn’t have to be that way.  There are many fantastic budget software options out there, and we recently found a system that makes it easy and really meets our family’s needs.  Plus, it has a cool name: You Need A Budget!

Whether you choose a slick computer program or a simple legal pad and pencil, please just get started so you can lay the foundation for your family’s financial success!

Share Your Plan (or Lack Thereof) with the Community!

I really want to hear your thoughts on this subject.  I was frankly enlightened by the feedback I’ve received here previously on financial issues, and I would love to hear how your own family handles the issue of financial planning.

Please leave a comment sharing whether you have a money plan and how you and your spouse address the need for unity (or don’t).  Thanks!

(photo source)

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Why You Want a Debt-Free Marriage

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Debt-Free MarriageWhen I wrote an article recently telling the story of how we paid off $54,500 in debt, the response was very positive, and I heard from a lot of people who were in the process of shedding their debt (or at least wanted to get started).  However, the reasons that I heard for becoming debt-free were mostly focused on the usual, more material motivations.

It seems that most people dream of paying off their debts to reclaim more freedom in their financial life.  The idea of getting creditors off their back and having more of their income to save or buy things to improve their quality of life is very appealing.  Honestly, that was a big part of why my wife and I decided we wanted to become debt free, and we achieved that goal (other than our home mortgage) two years ago.

I think the purely financial benefits are pretty clear and widely written about.  Instead, I want to share with you some of the awesome marriage benefits that a debt-free lifestyle provides.  While they weren’t our original motivation, our experiences in these areas have really grown our passion for getting (and staying) debt free.

5 Fantastic Benefits of a Debt-Free Marriage

1. Contentment

A funny thing happens when you get control of your money – you cling to it less.  With financial freedom comes a renewed focus on the things that really matter in life.  And when your values are in the right place, you depend much less on “stuff” and the false happiness that comes with it.

2. Communication

If you are married and you want to make substantial changes to your financial situation, you will need to talk…a lot.  The process of getting out of debt will require a real intimacy with your spouse and a deepening of the trust between you.  The spirit of teamwork you develop on your financial journey together carries over to other areas of your marriage as well.

3. Courage

If you have a lot of debt to pay off and/or you are already on a tight budget, achieving debt freedom will be a significant accomplishment.  When you meet a major goal, it fuels your faith in yourself and your ability to work alongside your spouse.  And it fills your relationship with the courage to face any challenge.

4. Change (for your whole family)

When you decide to shed your payments, you are breaking a cycle that most of us have witnessed throughout our lives, and you are setting a new example for your own kids.  With a solid financial plan, you’ll actually have resources available to help with your children’s future, retire with dignity and have the freedom of time to spend more with your family.

Personally, the best benefit that we’ve experienced since paying off our consumer debt is an increased ability and desire to give.  When we are generous with the gifts we’ve been given, we can change not only our own family tree but a little piece of the world as well.

5. Comfort

I will be the first to say that money doesn’t solve all of your problems, and no one should expect that debt freedom somehow brings instant happiness.  However, we certainly do sleep a little better at night knowing that we owe no one (other than our mortgage company :) ) and we have a healthy emergency fund in the bank.  This feeling of security and comfort is what financial peace is all about.

Debt Freedom Sounds Great, But How?

There are many great resources available to learn the mechanics of getting out of debt.  For us, it was Dave Ramsey’s Baby Steps alongside a solid budget that provided the game plan we needed.  I would encourage anyone interested in paying off debt and building a solid financial plan to pick up Dave Ramsey’s very popular book The Total Money Makeover.

Establishing a game plan and garnering motivation from these resources is great.  However, I have to say that we have discovered the real key to becoming and remaining debt free: mindset.

You have to believe that it is possible.  And you have to want it.  Bad.

Read the five benefits above again, and talk to your spouse about them. If you have debt, take some time to discuss what would be different in your life if you paid everything off.  Only you can decide if financial freedom and going against cultural norms is worth it for your family.

How bad do YOU want it?

(photo source)

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