More Money, More Problems #amiright
No, I'm not right, not really. This is one of those "it depends on your perspective" issues. Having more money can and will reduce problems related to financial stress and strain on the family unit. Having more money will also create good "problems" like how do you save money and make your money work for you.
Before we can get to the good "problem" of investing you need to first determine if you have any money to invest. So, we're starting with some basic info to get you started with tracking your personal finances each month.
Before we get into the nitty gritty, a few comments. First, this post is written from my perspective to my target audience – women who find themselves in a situation in which they do not have a full understanding, or any understanding, of their family or household finances – this has been left to their spouse who is likely the primary (or sole) breadwinner in the family. However, this post will likely be beneficial to you even if you are not in this position.
Second, this post begs the question why do I think it's so important to understand your personal finances. In a nutshell - it benefits you personally, socially, emotionally. If I can say that there is one common theme among the relationships that pass through my office it is that one spouse primarily handles the financials of the family, the other spouse primarily handles the domestic aspects of the family, and neither of them have a real or complete understanding of what the other is dealing with. When I say "domestic" I am referring to the typical family unit in which mom primarily handles and coordinates all of the family's and children's needs and schedules, plans meals and executes grocery shopping, etc., etc.
When neither spouse understands what the other spouse is dealing with, we lose the ability to empathize with our spouse – this loss is a loss of connection and leads people to instead feel resentment toward the other spouse. This resentment comes from the fact that at least one spouse feels like they are carrying a heavier burden to maintain the family unit than the other spouse.
I firmly believe that if you understand your family's finances and are engaged with your spouse in overseeing the family's financial goals and stability then your relationship with your spouse will improve and your confidence in your relationship will improve. Now, I do not expect and do not believe that you have to understand and be engaged in every way regarding the finances. It's simply a matter of efficiency that one person primarily handles certain tasks. However, I do think we should ensure that we have a basic grasp on the overall picture of our family's income and expenses. Going back to my initial post on this topic - you do not want to be the wife who comes into my office and says "I don't even know what my mortgage is."
So, to ensure that we can meet these goals I have created two downloadable Excel spreadsheets that you can use to track your income and expenses each month. The two sheets are identical with one exception - the first file is "locked" the second file is "unlocked". Those who are not familiar with Excel and do not want to risk screwing the formulas up by accidentally editing something – you should download the locked version. The locked version permits you to edit only those cells that need to be edited and it will not permit you to modify any of the formula cells. Each sheet can be downloaded by clicking the images below.
You should fill this Income and Expense sheet out each month. It definitely takes some work to keep track of all of the expenses, but, after 3 months, 6 months, and 12 months of tracking you will have an exponentially better understanding of your household finances than you did before. By showing interest and understanding in your spouse's primary concerns they in turn will [hopefully] return the same interest in your primary concerns. Even if your spouse doesn't return the favor, you will be better off in the end for having taken the time to learn some personal financial planning.
Feel free to modify the unlocked Excel sheet as it suits your needs. If you have questions regarding how to use the sheet, find an error, or if something isn't working, please shoot me an email or leave a comment!