DH = Dear Husband
DD3 = Dear Third Daughter
What are the messages about money that you absorbed in your childhood and have carried into your adult life? T. Harv Eker, in his book Secrets of the Millionaire Mind, says that each one of us has a money blueprint that wields enormous power in determining our financial health, and that most of us are unaware of it. He encourages his readers to reflect upon the “truths” about money that they came to accept unconsciously while growing up.
Where We Started
DH, who is reading Eker’s book, sat down with me and told me what he had discovered in his reflection. As he allowed his mind to go back to his childhood, DH recognized that for his father, money was always a problem – something to worry about; something ominous that needed to be controlled. DH considered his own financial behaviour in light of this blueprint, and realized that he habitually maintained a financial balance that was tenuous. When things were good, he made spending decisions that brought us back to anxiety. So for DH, homeostasis, when it came to money matters, was a state of worry requiring control. That was familiar. That’s what he subconsciously gravitated towards.
He asked me about my money blueprint. It’s difficult for me to sum it up as neatly as DH did, but here it is: My parents were excellent managers of money. They raised five children on one income; bought second-hand cars; stayed clear of the pitfalls of materialism; sent us all to university; and gave generously to their church and other causes. But the topic of money was politely side-stepped in my family. It was discussed in vague terms if at all. To me, it was only clear that there was a pot of money somewhere. I saw that money came from the man. I knew that there was money when it was needed. I learned, in my teens and early twenties, that there was money if I made enough of a fuss.
As a young woman, I was a disaster financially. All the good role-modelling of my parents was subverted by that trick I had learned of getting what I wanted by raising a fuss. In rebellion against what I had considered austerity, I enjoyed material purchases that I couldn’t afford, yet I was repelled by the base details of managing finances or acquiring any pot of money of my own. That’s what the future man would attend to. Carelessly in debt, I married a man who was always worried about money and anxiously wanting to control it. Mind you, he was in debt too. Eeeek! We each made good salaries though, so we’d be fine, right? You can imagine the respective shocks to our systems when DH lost his job. For him, there really was something to worry about, and he had lost control. For me, there was no pot of money, and I, the woman, became the principal bread winner.
Ugh! These are humbling reflections. We don’t need to wallow in them though; we just need to admit to them so that we know the point from which we’re moving on. For starters, I have to lose my repulsion from the “base” details of financial management. I have to work with DH to overcome our debts instead of leaving it all to the man. He is amazed by my recent engagement in our finances, and he welcomes it. It allows him to adopt a more positive outlook on what can be, and to cut loose the bonds of worry.
Where We Are
So what are our base details? I’ll start with the positive side – with savings. Ramsey, in his book The Total Money Makeover, advises to devote any savings to debt repayment, as long as there is no penalty to pay. Fortunately, we do have savings:
a) My retirement savings – I have a pension plan.
b) DH’s retirement savings – For sixteen years, DH contributed to retirement savings, but that stopped with the end of his former career ten years ago.
c) Education Savings – When our children were very young, we began investing monthly in an education savings plan that stops once the child is within a year of graduating from high school. We’re only paying into it for DD3 now.
d) Tax-free savings account – Just before we listened to Ramsey’s CD, we opened a tax-free savings account. We’re contributing $100 per month to it, and we’ve only made one contribution so far.
Savings a, b, and c cannot be cashed in to pay down our debts without severe penalties, so we won’t touch them. Savings d can easily be cashed in, but DH wants to keep it because he sees it as an encouraging hint of things to come. Although it’s only a few weeks old, we can already see a few cents worth of gains in it.
As for our debts, here is where we’re at: We have four debts that total over $257,000:
#1 New Car Debt – $8,600
#2 Old Car & Course Debt – $12,800
#3 Business Debt – $80,800
#4 Mortgage – $155,000
Dave Ramsey gives the strategy of paying off the smallest debt first and of “snowballing” towards the largest debt. So right now, it’s all about focusing on debt #1. With that in mind, we have our first monthly budget to finalize. There will be information to gather and decisions to make. For my part, I will dig into the details along with DH, getting my hands dirty with prices and sales and options. We’ve reflected upon where we started; we’ve acknowledged where we’re at; now we’re moving forward.