Three Tips to Becoming More Fabulous With Your Finances
Smart dads can do lots of dumb things, especially in the early days.
For my husband Dennis and me, insufficient snacks have led to hysteria on the highway. And insufficient rigor in the bathtub led to the cultivation of putrid smelling “neck cheese”. We have misplaced Teddy, mishandled tantrums and misdiagnosed everything from pink eye to flesh-eating disease. (Note to self: Don’t consult Dr. Google when hysterical).
Abby is now 4 years old and we have all lived and learned, largely without long-term consequences. The dumb things we have done are simply part of parenting and similar for anyone new at the game.
For any parent there is so much to keep on top of that it can be very difficult to keep on top of the family finances as well. Life represents a never-ending series of trade-offs between saving and spending, kids’ activities and mortgage payments, budget-making and sleep. But the fact is that many smart dads are doing dumb things with money. So here are my top three tips to being a smart gay dad who does a few more smart things when it comes to money.
1. Come up with a CONTEXT for money:
We gays with kids don’t have nearly as much time for our own hobbies as we used to. So don’t make personal finance a hobby. Instead, find your motivation for managing your money by answering this question: “What is money for?”
Over and above survival and security, how are you going to use money as a tool to help you live the life you want, today, tomorrow and when you’re 75 years old?
Our family’s answer to that question is “adventure.” Our money is for ADVENTURE. We do the boring stuff to get a handle on our money so that we will have more adventure with Abby today, tomorrow and when we’re 75 years old and want to take her trekking in Patagonia.
We live with hunter green laminate counter tops (the horror!) so that we have money to save for the intellectual adventure of university if she chooses it. We follow a disciplined, low cost investment strategy so we’ll have money for adventure in retirement and not require her financial support. And we happily spend the money to go to Provincetown for Gay Family Week so we can all have the adventure of hanging out at the beach with other gays with kids.
Your context for money could be anything. You money could be for BEAUTY, EXPERIENCES, FAMILY, TRAVEL, PRESTIGE or CONTRIBUTION. Whatever it is, your context gives you your motivation to make tough choices. If you do the boring stuff to get a handle on your money you’re going to have more of what you want over the course of your lifetime.
Tip 1: Answer the question, “What is money for?”
2. Address the CONSEQUENCES of your behavior with money:
Regardless of sexual orientation, most people are oblivious to what is going on with their money. There are an infinite number of things to want and a consumer culture that encourages us to “keep up with the gay Joneses.” The financial industry enables spending beyond our means by making it is easier to borrow money than it is to get lucky on Fire Island in July.
For most of us there are some things that aren’t working as well as they could be when it comes to our money. The broad categories to consider are:
- Spending: How could you spend in a smarter way?
- Earning: How could you bring more money in?
- Saving: How could you save more for what’s really important to the family?
- Investing: How could you improve the results of your investments?
- Repaying: How could you eliminate high interest debt?
- Learning: How could you figure out how much you need to retire and what it is going to take to get there?
- Organizing: How could you keep on track of things in a better way?
- Communicating: How could you communicate better about money with your spouse, parents, kids or friends?
- Taking action: How could you move forward on a goal that means a lot to you?
Each of those areas has consequences attached to it. Some are tangible, like wasting money on credit card interest. And some are intangible, like the stress of not being on the same page as your spouse when it comes to money.
Tip 2: Write down one area that is not working when it comes to your money and the consequences associated with it. And then commit to a few actions to improve in that area.
3. Manage the level of COMPLEXITY you have when it comes to money:
Smart gay dads often mismanage the level of complexity they need when it comes to getting a handle on money. As I said, you don’t need to make money your new hobby. But in all likelihood, there are areas where you should increase the level of complexity you have. For example:
More complexity when it comes to:
- Finding out where your money is going every month.
- Developing a plan to eliminate high interest debt, instead of waiting for the unicorns to write you a check.
- Actually meeting with your financial advisor, instead of ignoring her calls.
Less complexity when it comes to:
- Tuning out the daily stock market report.
- Tracking the minutiae of spending and focus on big things.
- Reducing the number of bank accounts you have to manage.
Getting a handle on your money can be overwhelming. But you don’t need to figure it all out at once. I have come up with something called “The Priority Pyramid” that works in the same way as Maslow’s Hierarchy of Needs. You can find out more about it.
Tip 3: Choose one area where you are going to increase or decrease complexity and do something about it.
Smart dads can do more smart things with their money by creating a context for money, addressing the consequences of their behavior, and managing the level of complexity they have so they focus on doing the things that will make the biggest difference. That doesn’t mean being frugal. It does mean making choices and finding your fabulous in new ways.
Bruce Sellery is the author of the bestselling “Moolala” series of personal finance books and appears regularly on television across North America. He lives with his husband and daughter in Toronto. Moolalamethod.com