Over the last two and a half years (!) of putting fingers to keyboard on this here blog, we’ve shared a steady supply of our successes and failures. And over time, we’ve noticed recurring themes and fundamental beliefs that continue to pop up and appear to drive to the core of everything we (try to) do. Earlier this week, we sat down, grabbed some root beer and sour patch kids (because we’re adults), and tried to answer the question, “What are our ten most important and guiding beliefs around money?” A few hours later, we stumbled away with a sugar hangover and a list we’ll call “Our Ten Money Commandments.”
We think these are a good representation of our core beliefs. So whether you’ve followed our blog from the very beginning (hi mom!) or tumbled down the deep, dark abyss of the Internets to find yourself here for the first time today, we hope these principles give you a better idea of who we are and what we believe.
1. Everyone needs a budget
This is where it all begins. The roadmap that makes everything possible. It has the ability to transform everyone, from the poor ramen-diet college student to first-class flyers who watch amusingly as we wait for our coach seats, to become purposeful spenders. Our budget is responsible for getting us out of debt in less than two years, planning for our daughter’s future, going on vacations (and keeping a budget while we’re on them), and putting money toward retirement. We still hate budgeting, but we love what it does.
2. Don’t spend more than you earn
Easy, right? More than almost anything else, a financial future built on this principle alone will dictate our financial success. And when we keep commandment #1, we usually don’t have to worry about commandment #2. Funny how that works.
3. Don’t get distracted by the nickels and dimes
We love a good deal. We’ll always look for ways to save money — from groceries to cell phone bills to haircuts. But it’s very easy to get distracted by shiny objects (like nickels and dimes) instead of focusing on the things that will really matter, like saving for retirement today and reaping the benefits of compounding interest.
4. Slay the Debt Monster as quickly as possible
Thanks to a debt snowball and some serious budgeting, we slayed our Debt Monster in just two years while living in NYC. It was psychologically liberating and an immediate boon to our finances. You’ll be hard-pressed to find an “investment” that delivers a guaranteed interest rate like debt. While we feel extremely fortunate that our encounter with the Debt Monster was relatively brief, it was long enough to remind us that we never ever want to meet him/her/it ever again.
5. Money is meant to be spent
Sometimes we get so caught up in the goal and numbers that we actually forget why we’re saving. But it all boils down to one thing: we are saving to spend. It doesn’t mean we have to spend it all today or tomorrow or by the end of the month/year/decade, but it should be spent. Your reason for spending might be different than ours, but money sitting around for the sake of saving is exactly what it sounds like — collecting paper.
6. Track your net worth
It’s easy to get caught up in the roller coaster of emotion as you follow the ebbs and flows of your investments and monthly budgets. We have to constantly remind ourselves of the big picture, and there’s no better way of doing that than tracking the progress of our net worth. Where our budget helps to guide the micro, our net worth helps show us the macro. It offers up powerful context when we need an extra dose of perspective.
7. Think about money for the times you don’t want to think about money
Life happens. Unexpected expenses arise. When those not-so-great surprises come up, the last thing you need to be thinking about is money, or the lack thereof. We work for and worry about all this money stuff so that when real worries arise, we don’t have to worry about money.
8. Personal finance is personal
Despite this list of broad-stroked commandments, we actually think some aspects of personal finance should be tailored to each individual person. Heck, we even have an entire section on our blog dedicated to the money spats that Joanna and I have on occasion. It’s up to you how you track your budget, how you save for retirement, and even what you decide to splurge on. And that’s the beauty of it — it’s personal.
9. Experiences will always be more valuable than things
We like buying things. But those things should never be a placeholder for the lack of experiences in our lives. Is it really worth working at a job you don’t like with a boss you hate working more hours than you can count all so you can buy stuff? We don’t think so. If the thing that makes you money is preventing you from experiencing life, it’s not worth it.
10. Money is a means to an end
As much as we focus on money on this site, we also think it’s important to make sure it never becomes a distraction. If we could pass along one mantra to each and every person as they lace up their shoes, comb their hair, and leave the house for another day at the office, it’d be this: I’m not working to make more money… I’m working to make the life I want.
Compiling this list was a good exercise and reminder for Joanna and me about what guides those green pieces of paper in our wallets. We’re putting a lot of faith in this list to take us to the financial promised land (should I include a few more overt biblical/money puns? Too bad, the post is over).
If you could modify this list to create your own money commandments, what would you add/replace?
“Cash for cars.” This is more of a philosophy than advice on purchasing cars. If you have the discipline to pay cash for the 2nd largest purchase you will ever make (and all others that are smaller) then that means you must be doing other things right: living below your means, saving, avoiding debt, and more.
Great Commandments! This essentially mirrors our financial boundaries within the Fitzgerald household. Only other commandment we would sprinkle in: Thou Shall Use Cash. Thanks for sharing!
I am Jan’s friend and responding to her FB comment about your blog. I always need more ideals how to manage our retirement income. It seems the biggest trouble we have is unexpected home repairs. As anyone knows that is a huge expense.
You are doing a wonderful job on this blog and I will be back.
I’ve learned a lot from your blog so thank you! YNAB has changed my financial health for the better. It’s a fantastic tool to keep track of everything. You do have to manually input information daily or weekly but I feel my privacy is more secure this way than with Mint. The biggest mental hurdle when you begin budgeting is coming to the realization of all the money you wasted on superficial things, or overpaid for stuff because you didn’t research the purchase, and that you haven’t saved enough. It puts things quickly in perspective when you have a financial goal in mind. I would like to start investing but feel I need to educate myself more. People talk about an 8% return and wonder exactly how they are achieving that.
I think money shouldn’t be an ultimate goal. As you said experience is more important and valuable sometimes. Best Regards, Josh.
Omg I love your writing styles. I actually had to resist from laughing out loud a couple of times. Thank you for sharing these commandments. I absolutely love what you said about “Money is meant to be spent”. I forgot about that for a minute. I’ve been so focused on paying off my debt and saving, I forgot what I was saving for. Great post, can’t wait to continue to follow along.
I think we forget your 5th tip, money is meant to be spent. We get so caught up in saving, that when it comes time to use the money, we’re always so hesitant to. Great read!