Let’s Talk Love & Money
In honor of Valentines, we’re curious?:
Do you currently share your financial life with a partner?
Have you done so in the past or plan to in the future?
Does the idea of sharing your financial picture with a significant other frighten or delight you?
Personally we’re a fan of sharing your financial life with a trusted partner (keyword: trusted!), because just like the saying “two heads are better than one” so are two incomes. With more money to save and invest, plus more ways to minimize your expenses (like sharing housing costs or those Netflix & Amazon accounts!), it’s possible to move faster towards financial freedom.
FINANCIAL TRANSPARENCY IS A GAME CHANGER
The financial transparency in my relationship has allowed for me and my boyfriend to become each other’s champions in a way I couldn’t have imagined before. Interestingly, we have already switched places as being the higher income earner (a few times!) which we see as a win-win for the team. In gearing up to launch the Factora, we didn’t just talk about my idea for the company ad nauseam, we put a financial plan in place to allow for my transition out of w-2 life.
Here’s a few things we did to prepare for my entrepreneurial journey to become a reality over the last year:
EMERGENCY SAVINGS: Typically we only kept 4 month of fixed expenses in cash so the rest could go towards investments that were growing our wealth with compound interest, but we increased our cash reserves to be more conservative while I launch a startup.
Note: Figuring out these numbers is part of the work we do in Factora Circles.
BACK UP EMERGENCY SAVINGS: We discussed which brokerage accounts would be earmarked as our secondary emergency fund if we needed access to more cash.
Note: This is why having non-taxed advantaged accounts are valuable. Unlike tax-advantaged accounts (ex. 401Ks & IRAs), you don't get penalized for taking your money out early (before age 59.5) when you need it! We learn about brokerage accounts and how to up your investing game in Factora Circles too.
BOUGHT A HOUSE: Not only did buying a personal residence lower our monthly living expenses by 22%, it also increased our net-worth while building up our overall portfolio in the real estate department.
Note: We also house hack by renting out a private downstairs space to a tenant that pays half our mortgage (Learn about House Hacking and building RE portfolios in an upcoming Factora Circle).
STOPPED EATING LUNCH OUT. We went on a year long ban to get better at meal planning and preparing home cooked meals. This allowed for leftovers to become our lunch and wasteful spending on lunches out daily to cease!
Note: This has also made us healthier!
GOT REAL HONEST WITH EACH OTHER AND OURSELVES. In talking through ways to significantly reduce our expenses, we focused on cutting out the things that didn’t serve us and keeping things that did.
Note: We recognized that we love eating dinner out 2-3 times a week so we built this into the budget to keep from feeling deprived. Now, we opt for fast casual restaurants and stick to a per meal budget which usually means foregoing either the drinks or the apps!