MONEY ADAGES

The money adages below are things to remember, to come back to and to re-learn as we go through life.  Since no one can accurately predict the future, the expectations we have for the things we put into practice today may not pan out.  That is the first adage: Our wealth and income will go up and down over our lifetime in an unpredictable manner.  The only things we can control are what we spend on now and what asset values we can insure today.  The rest is subject to chance and risk which we cannot control.

Couples need to work to come to agreement on their own set of money adages and be supportive of one another when either party deviates.  Then they need to be lovingly ready to come back to the adages agreed upon.  In addition, couples must also agree on how to amend their adages as life evolves for each of them.  Otherwise, money matters will become emotional separators in a relationship and couples will begin a spiral of resentment and withdrawal which can lead to terminating the relationship altogether.

I will discuss each of these adages and the issues surrounding them in subsequent posts this summer.  To become a “well-to-do” couple (meaning few worries about money as new opportunities present themselves) the most important adage is number 3: Spend quite a bit less than you can earn.  The reason is that income can vary greatly and expenses are largely built-in to our lifestyle (rent, utilities, food, gas, etc.) and are difficult to change.  If you choose instead to live paycheck-to-paycheck you will have few options when life changes and also, and most importantly, you will be working the rest of your life!  No one else is going to take care of you and your family as you age so it is important to save as much as you can now.

Here are the adages:

1.       Wealth and income vary a great deal over a lifetime

2.       Protect yourself against financial loss

3.       Spend quite a bit less than you can earn

4.       Learn how to do financial investing

5.       Learn to discern “bad debt” from “good debt”

6.       Couples manage financial affairs well when they agree

7.       Small investments pave the way for larger investments

8.       Financial planning works backwards from old age to the present

9.       Control as much as you can and insure the rest

10.   Doing all the above will make you well-off, but not wealthy

11.   To become wealthy you will have to risk it all

12.   Be prepared to start over again and again