Millennial Spotlight: The Best Things In Life Come In Threes (Part III)
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This particular Millennial Spotlight trilogy concludes with today’s post.
The first part of this post series introduced you to some foundational financial lessons my wife and I learned early in our lives.
I then followed with three financial lessons learned by my wife during medical school and residency.
The second post in the series laid out three lessons I learned during my time in college and graduate school.
In short, I found by living on my own, I quickly learned the importance of budgeting and trimmed unneeded excesses from my life; how I hold sole responsibility for the decisions in my life (including my education and career); and the need to differentiate between my skill and the results awarded to me by virtue of investing in a rising market.
This final post in the series walks through the three major financial lessons we’ve both learned together and practice as a married couple.
1. Automating Our Savings
The term “automation” scares people these days and understandably so for some professions.
Many see automation as a combination of robots and software replacing their jobs while simultaneously putting their livelihoods at risk.
While a case can certainly be made to worry for that scenario, in this case, I refer to making automated transactions work to our benefit.
What does this entail?
We learned to make automatic contributions by subscribing to the idea of paying yourself first.
We learned in doing this, it removes the temptation to spend and takes any lack of discipline out of the picture.
Ultimately, it saves yourself from, well, yourself.
As part of our budget, we learned to place a significant amount of our take-home pay into our savings.
Currently, we save between 40-50% of our combined salary and plan to maintain this amount going forward.
Meeting this threshold requires us to contribute before budgeting money for bills, food, entertainment, or travel.
Because we prioritize buying a house in the near future and retiring comfortably, we put savings contributions as our first budget item and work our way from there.
We also automate our bill pay to avoid incurring any late fees or penalties.
We have learned making automatic deposits into our investment accounts makes this budgeting easier to handle.
At first, setting this money aside was slightly difficult but became an easy habit as time passed.
Make no mistake, automating your savings is simple, but it isn’t always easy.
For us, we found our lifestyles easily normed to our remaining budget.
We started fairly big and continue to do so.
However, phasing into larger contributions by starting small and steadily increasing can serve as a viable route as well.
Automating our savings has helped us to take concrete steps in our financial plan toward buying a house and reaching financial independence.
2. We Plan For What We Both Want
This second item easily ties into our first lesson.
We had similar ideas for what we wanted out of life but different ways of going about getting it.
I cannot understate the importance of having a financial plan.
Having the self-discipline to outline the goals in life you want to achieve and lining up not only your finances, but your day-to-day decisions, to accomplish your goals are necessary traits for reaching any significant milestone.
We learned to map out the major milestones we want to accomplish and make decisions to support these becoming reality.
One example being the automation of our savings mentioned above.
As I mentioned before, we have ambitions to buy our first home together in the next two to three years but also want to keep a firm eye on our future by prioritizing a safe and comfortable retirement.
We will also have to repay a reasonable amount of student loans my wife carries from medical school and replace some aging cars with some newer ones.
Not to mention what kids will take to manage financially.
Everyone faces different life circumstances in terms of jobs, family structure, and priorities.
Just because these differences exist doesn’t excuse not having a financial plan if you have goals in mind.
One common theme which threads these various life scenarios together: making regular, sizeable contributions to your savings.
Luckily, we learned to make a financial plan, meet it by automating our savings, and letting passive investments store the majority of our wealth.
We balance all of these items with the understanding life offers competing priorities and perpetual FOMO (fear of missing out).
We can’t keep pace with the Joneses, so we don’t try.
We set our priorities as our focus and feel satisfied as we work toward accomplishing them.
3. To Merge or Not to Merge Our Finances
When couples get married, romantic feelings from the blissful day take center stage.
And why shouldn’t they?
But as the lovebirds come back down to earth and reality sets in, they should prepare to file some paperwork.
And depending on the number of financial accounts the two hold, a lot of it.
Talk about a buzzkill.
It turns out getting married comes with a lot of administrative work required to combine bank accounts, add authorized credit card users and life insurance beneficiaries, change inheritance rights on investment accounts, and much, much more.
For us, we had to learn just how much of our financial lives we wanted to merge.
Purely based on anecdotes, not all couples we know have completely merged their finances.
Some maintain entirely separate accounts and contribute toward shared expenses like rent, utilities, food, travel, and just about anything else.
We also know some with a shared bank account and have all money flow entirely through it from both individuals.
For us, we chose a system where the vast majority of our income directly deposits into a shared bank account where we pay for all the usual trappings of married life.
We didn’t get here overnight, however.
We debated just how to handle our money because both of us had grown accustomed to watching out for our own financial well-being.
We settled with a system where we both keep a very small percentage of our respective incomes in separate, legacy bank accounts from before we married.
This allows all of our communal expenses and investment contributions to be borne by both of us since we both stand to benefit.
We’ve hit a few snags along the way regarding timing of when paychecks hit bank accounts, sharing joint responsibility on paying for our housing, and just how much monthly expenses can amount to for two people.
Currently, we allow our automated savings contributions to represent a big portion of our incomes and pay for expenses as we go along.
Starting next week, we’ve decided to take the next step and establish a monthly budgeting meeting with each other to make sure we’re handling our money wisely and making progress toward reaching our shared financial goals.
Learning to Become One Unit
During our lives, we’ve experienced many life lessons which have guided our ways of thinking.
Separately, we absorbed the behaviors of our parents and developed many foundational habits.
During our formal education, we continued this learning through encountering new challenges and finding ways to overcome.
And together, we’ve made solid progress molding our lives together and learning how to think about each other and what lays ahead.
I sometimes joke I don’t believe in having a better half by making the argument one and one make two.
After a year of marriage, I still see this as true, but recognize the metaphor of two separate people becoming one.
We provide balance to each other and work together with our different styles.
We’re both whole people and we certainly give more than half of ourselves to each other and the things we do
I hope you enjoyed the three posts that Riley from Young and the Invested submitted.
I am amazed how these particular millennials are wise beyond their years as I remember myself at this age fumbling through life and making mistake after mistake.
Please visit Riley’s blog and gain some further insight into various other financial topics found there.
This post is actually the 100th post on this blog!
Not too shabby for having a late start in the year with the first posts officially launching April 23, 2018 (an easy date to remember as it coincided with my 47th birthday).
If you asked me how many posts I expected before this blog went in flames, I would have predicted about half that number.
I really want to thank everyone for their support by visiting and/or commenting on this site.
I truly appreciate those who took the time to comment and encourage me on this endeavor.
I had absolutely no clue what I was doing (and some may say I still don’t) when I pressed the button to launch this blog and thought I would be found out and exposed by now.
I hope you all return next year and watch me continue along on my blogging journey, bumbling and stumbling along the way.
Here’s to the next 100 posts (and hopefully many more).
Anyway have a wonderful and safe New Year’s Eve.
I wanted to make mention that those who are considering refinancing their student loans should really take advantage of Splash Financial’s generous offer which officially ends Dec 31st:
Splash Financial Bonus: (Good for Refinance Applications submitted before Dec 31, 2018)
- $500 for refinancing $30k+
- $1,000 for $100k+
- $2,000 for $200k+
If you are in search of financial help, please consider enlisting the service of any of the sponsors of this blog who I feel are part of the “good guys of finance.”
Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.
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I would be incredibly grateful for your support if you do indeed choose to nominate this blog for an award.
(and it would make my first FinCon an even more incredible experience)