I have a young married couple as clients with whom I love to meet. They are in their late 20’s / early 30’s. Both went to college to become teachers and both taught in local elementary schools. You might guess that they don’t have large sums of money to invest. You might also guess that their disposable income isn’t in plentiful supply. In both cases you would be correct.
Is It What You Earn or What You Spend?
Despite a relatively low combined income as two new teachers, this couple went about putting first things first. They made a budget and began learning to stick to it. They started saving for an emergency fund, college for their kids, and retirement. They purchased life and disability insurance. They took care of those things that mattered most to them and they still made it work. Many people on much higher incomes cannot seem to figure out how to do what they were doing.
From Little to None
Over the time that we have met they have made some choices that, at first glance, do not seem helpful to their financial situation. They have had two children. After their first was born they decided that the wife should work two days a week instead of full time. After their second was born they decided to have her stay with the children full time. That was more important to them than their financial goals, as long as they could survive.
As they were making the decision to have the wife stay home full time they came to me for help. They could not see how to make their budget work, but they felt like it was really important that they did. We spent some time together working through it all and even though it was tough, we found a way to make it work. Soon after I even got an email from them saying that their email address would be changing because they had started using a free internet service.
Some Things Just Don’t Add Up (Because Parts of the Equation Aren’t Visible)
Soon the husband found a job as an assistant principal. Not only would the salary increase but the commute was better. Other things have worked in their favor. They have not needed to take any money out of their emergency fund. It is still an ongoing and recent change in their lives, but I know that it will work out.
I want to go on record with this prediction: If this couple stays on course with the decisions that they are making I will be writing about them again in future years. In 10-15 years they will be in a better position than nearly all of their peers, even if they remain on one income. When we want badly enough for a decision like this to work out, it does. There is magic that enters our lives as we make good decisions and parts of the equation that we never saw begin to appear and have a multiplying effect on financial and family wellbeing.
* This article is commentary on basic principles. In no way should the things said in the article be construed or interpreted to be advice for your specific situation. Before making any financial decision you should consider all factors and consult with a professional.
Your Next Step
Budgeting is not restrictive. You won’t be spending less, you’ll be spending right. So what do you have to lose? Except all that debt and stress?