Big Money Meetings

Today's grativibe is about overcoming fears and working together.

Have you and your spouse figured out how to talk about money yet and not feel angst?  Are you satisfied, or even happy after your money talks?  It took Kim and me years!

We started our marriage by buying a really beat up house and pouring lots of money into it (we are still pouring money into it, fyi).  I had been divorced and, of course, that means a lot of my assets went to other purposes, so I felt like I needed to ‘catch up’ on retirement saving.  I felt a constant pressure.  Yet there we were, starting with a fixer-upper, taking vacations, buying appliances. 

Kim here:  Ummm… we made an offer on this house in July, got married in August, honeymooned (hence, taking vacations), and closed in September.  The day we closed, we bought a refrigerator and moved it in.  The next day, we left our two perfectly habitable homes and moved two houses of furniture and FOUR dogs into this ramshackle house full of spiders and broken windows.  We needed a furnace almost immediately but had no stove for four months, so the “buying appliances” part is somewhat debatable.

We were balancing a new mortgage later in life and spending lots while being behind on retirement savings.  I kept a monthly budget, I put money into my 401(k), but in the back of my mind I was always nervous about money. 

So my first attempt at easing my stress was to create the SOAS – Spread Of All Spreadsheets!  We did not have a financial advisor yet.

Kim here again with a brief side story (those who know me know that Side Story is my middle name):  Well, we did have a financial advisor, but he was more than an arm’s length away.  He gave us poor advice that cost us tax penalties, and we fired him.  We moved all our savings into cash while we moved to other investments.  This transaction was happening while we were on vacation in Florida in 2008.  While having coffee and watching the news one morning, we learned of the market crash.  OMG. We had no idea where our savings were, how much we lost.  When we got home and retrieved our mail, in it was a letter confirming all our assets had been moved to cash literally days before the crash.  It was truly a miracle, and we thank God to this day.

The idea occurred to me that if I take my monthly budget, and my monthly retirement savings, multiply by 12, and project it forward until age 65, accounting for inflation and returns on investment, I could see what our financial situation would be each year up to and even beyond retirement.  It was a HUGE help!  I was so proud!  Look at the answers I now had!  It took some time to review & refine it, but I eventually got it to a point where it was helping me make big decisions on regular savings, major spending events, investing, etc.  It was very satisfying and calming, and I have shared with my brother and a friend or two.  Yet…..Kim was not interested in talking about it!  This wonderful woman who LOVES spreadsheets and whose father was a math teacher doesn’t love my SOAS?!?!  What is going on here??  I really thought about this, because I wanted us to be working together.

Look, I had been doing fine living on my own for years.  I didn’t want to be judged.

Pretty regularly, either Kim or I will suggest a BIG purchase.  A couch, a vacation, a room remodel, a driveway (we still have a gravel driveway).  Some are needs, some are wants, some are necessities.  But they were always big, often involved debt, and always put a knot in my gut.  A nice way to describe this sometimes out-of-control tendency of ours is ‘inspirational spending’.  It’s OK to be inspirational spenders……it can be really fun actually, and you have to live your life…..but it’s not as fun if you are not prepared.  And we never were.

One day, after an ‘inspirational’ suggestion that involved spending a big chunk of money we didn’t have, I realized that we don’t need to talk about the details of money; we need to talk about our mutual GOALS.  About our mutual PRIORITES.  About what WE feel is important, and WHY. 

It got testy this business of Doug wanting to talk finances and me resisting baring my accounts and being judged.  Finally, I conceded.  And guess what.  It wasn’t so bad.  We even gave it a name to make it fun.

The Big Money Meeting was born.

We established some unofficial Big Money Meeting ground rules:

1. Either of us can call a Big Money Meeting.
2. There is no set schedule for Big Money Meetings.  They are called when one of us wants to discuss an important goal or purchase.
3. There are no accusations or anger – just working together to accomplish goals.

Here’s how they go down:

1. It all starts with an 8 ½” by 11” sheet of blank paper.
2. I write 3 numbers at the top:  Our net worth, our total debt, and our cash and equivalents.  Then I put a little arrow next to each of these to know if the totals went up or down since last meeting.
3. We discuss!
4. I write down the action items that resulted from the discussion, and we put them into action as quickly as we can.
5. I put the sheet of paper in my Big Money Meetings Folder for future reference.

What have we discussed at these meetings?  Topics as wide ranging as: Should we buy a vacation home?  When can Doug retire?  How big does Kim’s catering business have to get?  What if we shut down Kim’s catering business?  How can we increase our household cash flow so we can save more for retirement?  When can we get that driveway?

I’d say Kim has called as many meetings as I have – and she calls them with an air of power in her voice!  Sometimes I will call one just because I want to check in on how we are doing (I feel one of those coming on soon!).

I am reading a really good book right now, "The Charles Schwab Guide to Finances After Fifty", so I will be calling a Big Money Meeting to review Social Security spousal benefits.  This may not sound exciting, but when you put it in the context of my ability to assure Kim, 10 years younger than me, that she will have good financial support late in her life, it’s really important to both of us.

These meetings are indeed very empowering for both of us, because we know we are going to have an honest discussion, no forcing of opinions on one another, good questions will be asked, we will discuss the numbers that are realistic and important, and we will look objectively at what we can and can’t do.  In the end we will both have the same opinion on what our goals are and how we can get there …or if we just have to say ‘no’ and accept things as they are!

For me, the biggest reward is that Kim owns these meetings as much as I do.  It’s a great feeling that we can talk openly and ask one another what is important and why.  Get creative – make it your own.  We’ve had them at Friday happy hours, we’ve had them on vacations, we’ve had friends as ‘guest speakers’, we’ve held them on our back deck with wine.  The title of our meetings is silly and serious at the same time, which is basically how the meetings are supposed to be, too!  I hope this little technique helps you as much as it helps us!

Kim here one last time… Listen, if you have no idea where to start, first let down your defenses and remember that you want to build a secure future with your significant other BECAUSE YOU LOVE HIM/HER. Open yourself up to conversation and stay calm. Try reading the book that helped Doug. Create your own amazing spreadsheet to use as a starting point.  And if it's in your budget, find a financial advisor who gives you the guidance and attention you need at the pace you need it. It's okay to have questions. It's okay to expect thoughtful answers delivered with patience. Believe me, I know!