Good morning! Today we have a guest post from Matt Becker, a personal finance blogger at Mom and Dad Money. Matt is a proud husband and dad who enjoys sharing the lessons he’s learned with other young parents.
I really don’t like it when I have to think about my money.
Now, don’t get me wrong; I enjoy learning about financial issues, exploring new strategies, and finding the best ways to manage my money. But I prefer to do it on my own terms.
When I’m forced to think about my finances, it’s usually because something’s gone wrong and needs a quick fix. This brings about feelings of uncertainty, guilt, and time pressure, causing a lot of stress. This stress complicates decision-making and affects my mood and interactions with my family.
While good financial management is essential, I didn’t grow up wanting to track all my spending or create detailed spreadsheets for my investments. I certainly didn’t dream of obsessing over every spending decision, worrying about my bank balance.
I envision a simple life where I spend quality time with my family and do work I enjoy. To reach those goals, I’ve tried to set up a financial system that allows me to be as hands-off as possible, freeing me up to focus on what truly matters.
So, what financial worries do I have?
There’s a long list of potential concerns:
– Have I paid all my bills on time?
– Am I saving enough for retirement?
– Can I provide for my family?
– What if I lose my job?
– What if I pass away?
– Can I afford to attend my best friend’s wedding?
While these are all valid concerns, worrying about them daily takes time and energy away from other aspects of my life. Here are a few simple strategies I use to reduce financial worry.
First, I set up a safety net.
I have a large emergency fund—six months of regular expenses and about nine months of emergency-level expenses. This would help in case of unemployment or unexpected costs. I also have sufficient life, disability, health, and liability insurance. My wife and I have wills and a living trust to ensure our son is cared for, should the worst happen. While these precautions don’t eliminate pain, they ensure my family is financially prepared.
Next, I establish good, simple, and consistent money habits.
We’ve all heard the advice to live below our means. It’s true, but hard to follow. My approach is to avoid tough spend vs. save decisions by forming regular habits. I bring lunch to work, and my wife cooks dinner. We take our son to the park instead of paid activities. I’ve explored different travel routes to find the most time- and cost-efficient options. These simple habits help save money without constant tough decisions.
I also automate as much as possible.
My paycheck is direct-deposited, and my bills are on auto-pay. Retirement contributions are automatically transferred from my checking account. We have automated savings for things like travel and car maintenance. A simple Excel sheet tracks my investments. Setting all this up took some time, but now things run smoothly without much thought.
I regularly check in.
Even though most of my financial tasks are automated, I still check in regularly to ensure everything is running smoothly. My wife and I review our budget weekly, usually taking about 15 minutes. Once a month, I review our accounts and track our net worth, which takes another 15 minutes. I also check my investment spreadsheet weekly, a five-minute task. In total, we spend about 1.5 hours a month reviewing finances. This little bit of time keeps us organized and ensures any issues are quickly addressed, leaving the rest of the month worry-free.
Finally, I make sure to relax and enjoy life.
Setting up this system required effort, but it’s organized and focused work that reduces financial worry. I can play with my son without worrying about bills. My wife and I can plan for tomorrow because today’s finances are managed. I work for the joy of it, not out of necessity. I’ve aimed to create a life where I control my financial relationship, not the other way around.
Achieving this level of financial independence has been my dream. What’s yours?
