CRAFTING A STRESS-FREE FINANCIAL FUTURE

CRAFTING A STRESS-FREE FINANCIAL FUTURE

Good morning! Today, we have insights from Matt Becker, a personal finance blogger at Mom and Dad Money, who shares his experiences and wisdom on managing finances, especially for young parents.

I really don’t like having to think about my money. Now, don’t get me wrong—I enjoy learning about financial topics, experimenting with different strategies, and finding the best approaches. But I prefer doing this on my own terms.

Typically, when I’m forced to think about my finances, it’s because something urgent needs attention. This scenario brings confusion, guilt, and stress, impacting my ability to make sound decisions and affecting my mood and interactions with my family.

Good financial management is essential, but growing up, I didn’t fantasize about tracking every penny or creating detailed spreadsheets. I didn’t envision a life where I’d worry over each spending decision due to its impact on my bank account. Instead, I dream of a simple life, enjoying quality time with my family and engaging in work I love. To achieve this, I’ve structured my personal finances to automate as much as possible, freeing me to focus on what truly matters.

There are numerous financial worries we all face:
– Did I pay all my bills on time?
– Am I saving enough for retirement?
– Can I provide for my family?
– What happens if I lose my job?
– Can I afford to attend a friend’s wedding?

While these are valid concerns, worrying about them daily consumes precious time and energy. I aim to free myself from this constant worry, and here’s how I do it:

Set Up a Personal Safety Net
The first step is preparing for worst-case scenarios. I have a significant emergency fund, enough to cover six months of full expenses or nine months of emergency-level spending. This buffer can help during unemployment or unexpected costs. Additionally, I’ve secured ample life, disability, health, and liability insurance. We also have wills and a living trust to ensure our son is cared for if something happens to us. These measures provide peace of mind, knowing my family has financial resources in tough times.

Create Good, Simple, and Consistent Money Habits
Living below your means is age-old advice but vital nonetheless. Many struggle to follow this, often choosing immediate gratification over saving. I sidestep this by establishing habits that remove the spend-or-save dilemma from my day-to-day life. I bring lunch to work, my wife cooks dinner, and we enjoy free activities like parks and playgrounds with our son. Over time, these simple habits save money and reduce the stress of constant financial decisions.

Automate as Much as Possible
Automation is key. My paycheck goes directly into my bank account, bills are on auto-pay, and retirement contributions are scheduled regularly. Savings for travel, car maintenance, and health appointments are also automated. Setting this up was initially time-consuming, but now it runs smoothly, and I rarely have to think about it. This system eliminates worries about bill payments or savings and allows us to focus on other priorities.

Check In on a Regular Schedule
While our system runs on autopilot, we still have regular check-ins to ensure everything is on track. My wife and I review our budget weekly, which takes about 15 minutes. Monthly, I check all our accounts and net worth, another 15-minute task. Weekly, I glance at our investments to see if they need rebalancing, usually a five-minute job. This organized routine means we spend only about 1.5 hours per month on our finances, freeing up time for other activities and reducing stress.

Relax and Enjoy Your Life
Organizing finances takes effort, but it pays off by minimizing financial stress and allowing us to enjoy life more. I can play with my son without worrying about bills, plan with my wife without financial anxiety, and work out of passion rather than necessity. I’ve structured my life so that money doesn’t dictate my choices—I do.

Independence from financial worries is my dream of financial independence. What’s yours?