Ever get nailed by a surprise bill? Yeah, you knew insurance was due for the year but you thought it wasn’t till next month? This episode is about pain relief! More specifically, relief from the impact of those bigger, occasional, or annual bills.

Not only do we need to keep track of our everyday expenses and budget for them, we also need to set up the part of our budget that deals with mid and long term planning. Emergencies also arise, so being prepared for those is very important too.

We often fall into the if-then trap of “If I won the lottery, then everything would be fine financially”. Ironically, most lottery winners totally train wreck their lives. The words of the Bible are so true, “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.” (Proverbs 13:11).

Because this is so true, we need to step away from this if-then principle and start working on consistent strategies of gathering little by little. Another reason to start this is most of us are not going to win the lottery, have huge inheritances from our parents, or a windfall from the stock market!

There is something called the family stress theory which predicts that improved communication about finances should decrease hostility and increases warmth and supportive behaviours.

You need to talk through all this budgeting stuff with your spouse because not only is financial stewardship the right thing to do, but it is also a significant factor in improving the quality of your marriage relationship.

The researchers cited that financial factors predict 15% of marital satisfaction. That’s a lot of satisfaction based on ONE factor! This means that the greater your financial problems, the lower the quality of your relationship. Financial issues create emotional distress and part of reducing that stress is not only budgeting month to month but also making sure you have a plan for the larger bills and for creating long term savings for yourselves.[i]

Long-Term or Retirement Savings

One great strategy to creating wealth for the future is to find a financial advisor. The intentionality and the relationship you build with your advisor forms a kind of accountability and helps you get real and determined about your savings.

People who use a financial advisor:

End up establishing long term goals and work towards filling them

Actually, sit down and calculate their financial needs for retirement

Create savings accounts dedicated to retirement

Increase the amount of money they save regularly

Report greater retirement confidence

Accumulate significantly higher levels of emergency funds.

If you want these things to be true of you, then you might seriously consider getting a financial advisor who is trained and qualified in helping you create your own retirement savings plan.[ii] Since we got ours, it has created useful discussion and helped us to be very clear, consistent and confident about our own savings.

Another way to make wealth grow is by living within your means and saving. Here are four key concepts to think about:

Keep finances simple and live within your means. Get loans paid off: credit lines or equity loans, automobile loans and credit card debt. All these things enable you to live beyond your means.

Save and invest 10% of your earned income annually. This is especially critical if you are employed as a wage-earning family.

Whatever proceeds come from your investments, that income should be reinvested, ideally, all of it. Interest income should be put back into the investments as a long-term strategy to multiply your wealth.

Exchange wealth-depreciating assets for wealth-creating assets. [For example, if you were to exchange the asset value of your 50k main vehicle, your 30k second vehicle and your 40k camper trailer and choose 2 vehicles (used) worth 10k and 6k, and scrap the camper. Then you could invest just over 100k in a down payment on a rental house,