Top Tips to Design Your Family Finances

Money, Money, Money

What does it mean to you?

I'm going to be honest with you - I believe if you are in a committed relationship, raising kids together, you need to pool all your resources.

Whether it is sharing childcare, the household tasks, the mental load or money. You need to be in this together. 

I still remember the motivational motto we had when used to trudge round Dartmoor in the winter when I was a teenager, preparing and competing in  the Ten Tors Event. 

T.E.A.M. = Together Everyone Achieves More. 

It was important when I was a skinny, slightly awkward 15 year old with an oversized backpack and it’s important now as a Dad and Husband.

Breadwinner or Kept Man?

Many of you male readers will be the primary breadwinner. I'm not even close to that in our house and never have been. When my wife and I met, she earnt 50% more than me, by the time we got married it was 100% more and now it's an even bigger gap. We joke that while she brought a flat and equity to the relationship, I brought a 5 year Ford Focus. 

But none of that matters because

1) We have clear family goals and a plan to achieve them.
2) We understand how much money it costs to meet those goals.
3) We pool our resources - in all parts of our life.

We're in it together -  with a single current account, with various saving accounts for different family goals.

The 2 things you need to do…

There are two things I want you take away from this post 

If you are the primary breadwinner you wield power, both spoken and unspoken. You need to use that power wisely, your relationship will fail if you do not respect your partner’s ambitions and desires and to be honest you don't get to be the breadwinner unless your partner is raising your children - she is enabling your ambitions by being there for the kids. 

1) As a couple you need to be clear on your individual and family goals.

You need to sit down and discuss it properly. Maybe your partner doesn't want to be tied to the school run for 10 years. Do you even know? Maybe you don't want to be working another 20 years for 50 hours a week in this job?

Not sure where to start? Click here and get hold of the free exercise you need.

As Chris Baker from St James Place Wealth Management reminded me the other day - don’t forget to factor in the costs of goals such as University, Life Insurance and Critical Illness cover and potentially school fees. These all require thought, care and an awareness of “combined resources and combined stated, specific objectives. “

2) As a couple you need to work out a financial plan that works for both of you

✅  Treat your finances as joint income and joint expenses.

"A woman on maternity leave having no access to her own money without asking her partner "would be similar to if her partner came into the kitchen and had to ask permission to eat something," 

Source: Quartz at Work

❌ Don't be dismissive of your wife's income 

"I said to her, ‘If you take your job and net out all of the day care expenses and net out all of the extra tax that we have to pay because you work, we’d fundamentally be making the same amount of money between us.’
Source: Harvard Business Review

❌ You shouldn’t treat childcare costs as just an issue for the Mum

"Oh and the point I would add to the bit about paying for childcare is that I think that so many people view childcare costs as coming out of the mum's salary, so feel it isn't worth it. Eg she earns £1.5k and the nanny costs £1.2k, so what's the point? In my view, you should combine both salaries, then deduct childcare costs- they are joint children and a joint expense and conceptually seeing this as coming solely out of the mum's I think is hugely undermining and demotivating."

👉 This is what you need to do 

1.     List your family priorities 
2.    Work out the financial impact for each priority
3.    Will your priorities reduce or increase your family income?
4.    How much money will need and when?
5.    How will you fund it?
Save now for future? Use savings now? Borrowing? At what cost?
6.    Review your current finances
Each month - what’s coming in, what’s going out and where is it going?
7.    Talk about your finances with your partner
Are you Spenders, Savers, Risk takers, Security seekers? Who controls how money is used? 
8.    Design your future budget
Factor in your family priorities, what needs to change to allow those priorities to be supported

Click here for some ideas on how you might make it work 

👉 By the end of the process

• You’ll have reduced your stress by understanding where your money goes.

• You’ll understand how much money you need to achieve the priorities.

• You’ll know what changes you need to make to make it happen.

Don't forget you can click here and get hold of the free exercise you need 

It’s Never “Just” Money

It’s Never “Just” Money

Yesterday I had a great free work life balance stress buster call with "Jim"

Like you he was looking answers to the challenge of Being a Great Dad and Having a Great Career....

I'm not going to embarrass myself and pretend to know what the answer will be for Jim or for you.

But what I do know is that with the right process and the right support, you absolutely can work out your own path. A path that works for you and your family.

********************************

Jim works away from home during the week and has done for most of his working life, the money is good and his wife has a good job too, but he's been struggling with work life balance for the 6 years since his first child was born.

He changed jobs a few years ago, but found that losing out on the creative buzz of the old role was too much to bear.

Now at a bit of a cross roads he booked his free call

I asked him to describe how he wants to feel in 6 months time, when life is how he wants it...

✅ Happy

✅ In the zone

✅ Supportive of others

✅ Sleeping more than 6 hours a night

✅ Feeling strong

But right now he told me

"I don't want to be the Dad who isn't there"

"I don't want to have a life of regret"

"I find I don't laugh as much"

The great thing for Jim, is that he and his wife do talk about how he feels. They've had the type of honest conversations that are so important if you are going to make progress. But Jim admitted to "toning down the volume" on just how unhappy he is.

It's often easier to do that isn't it. Put on a brave face and get your head down.

Then we talked about money.

Money is never just about the pounds and pence. It's loaded with value and meaning. How much you need, how much to spend on your kids. How much you had when you were growing up. How and when you reward yourself. The life you want to give your family. The life you see other people giving their families. Your relationship with borrowing and debt.

Truth is that Jim can afford not to earn as much as he does....

But what would his kids think if the nice holidays aren't as nice?
What would his in laws think if he didn't "make it"?

However, he's spending hundreds of pounds every month on a Nanny to have "quality time with my kids."

It's never just "money"

✅ and that's why being honest with yourself and honest with your partner is so important .

If you need some extra help, someone to listen while you unload your burden, then you could do a lot worse than to book a free call with me

https://www.inspiringdads.co.uk/sign-up-consult

I look forward to helping you too

Ian

How to have enough money for the things that really matter.

You've got dreams and aspirations...

and a shared purpose with your partner, but when it comes time to take action and put it all together, these dreams had better be good ones!

They'll need to be robust and aligned with what you truly want because it's likely they require some sort of investment. 

Most of us don't have the financial freedom to do everything. There are trade offs to be made. 

Imagine you want to take a step away from the career path you are on?

That's not going to be possible if haven’t aligned your family finances with your family priorities. You need to make sure you are spending on or investing in, the things that allow you to truly live the life you and your family want.

new career, New Kitchen or a trip to disney in Florida - these things take planning.

7 Steps to Financial Clarity

1.    Start with a list of your family priorities / objectives.

2.    Work out the financial impact for each priority.

3.    How much money will they need and when?

4.    How will you fund these priorities?

Save now for future spending? 

Use savings now?

Borrow and repay later. At what cost?

5.    Review your current finances

Each month - what’s coming in and what’s going out

7.    Talk about your finances with your partner

Are you Spenders, Savers, Risk takers, Security seekers? Who controls how money is used? 

7.    Design your future budget

Factor in your family priorities, what needs to change to allow those priorities to be achieved

By the end of the process

• You’ll have reduced your stress by understanding where your money goes.

• You’ll understand how much money you need to achieve the priorities.

• You’ll know what changes you need to make to make it happen.

Need some help making it happen? Book a free 20 minute call with me to discuss your options.