Picture a young married couple fresh out of college. They’re new to this “adulting” thing. Net worth is deep in the red. Cash flow is tight at best. But they are just “livin’ on love” – as the song goes.
This is a common starting point for many young couples. My wife, Lauren and I, included. This starting point is actually a fork in the road and each couple makes a decision, whether they know it or not, that sets them on a specific path.
One path leads them toward viewing finances as a burden, stressful, and anxiety
inducing.
The other leads them toward financial freedom and purpose.
Path #1
Picture that young couple again. They now have jobs that are earning them regular paychecks that are probably larger than they have ever seen before. Naturally, they feel freedom in their new found independence, the transition away from paying college tuition, and a new marriage or life together. They may want to upgrade their car, go on some fun trips as a couple, and get the things they want because, “Why not?” They are actually making money now!
Before they know it, they have a car payment (or two), a couple thousand dollars in credit card debt, and student loans repayment burden that starts six months after graduation. Oops, forgot about those…
Their cash flow just went from tight to razor thin. They handcuffed themselves to debt payments each month.
Now after a few poor decisions right out of college, they find themselves living paycheck to paycheck. Stuck in this cycle of never feeling like they can get ahead financially. They aren’t even thinking about saving for the future or giving because they are barely treading water.
And then, something as routine as a car repair feels like an emergency and with no emergency savings, that expense ends up on the credit card.
Put yourself in that situation. Do you feel peace? Are you content? Does money feel like a burden or give you freedom?
Path #2
Again, we are starting with the same young couple. They feel the same feelings of freedom as the other couple on path one, but they had a parent, mentor, or advisor share the importance of having conversations around finances and being intentional with your spending right out of the gate.
This couple sat down together and had conversations about their goals and values early on. Where do you want to be in five years? Do we want to buy a house? Do we need a new car soon? How long do you want to be paying off student loans?
They talked through these questions and sought the advice of that parent, mentor, or advisor. After discovering their goals and values, they started an emergency fund and made a budget together that would help them start on a path to reach those things they defined as important to them.
Just like the couple in the first example, there are always unexpected expenses that come up. Curveballs get thrown at us. That may cause them to tweak the budget a bit or pause our savings goal as we refill our emergency fund, but it’s not detrimental. It also doesn’t go onto a building credit card balance.
Now put yourself in this couple’s shoes. Do you feel peace? Are you content? Does money feel like a burden? Or does it give you freedom?
Which path will you choose?
I want to point out the obvious: these are hypothetical, high-level situations but are based off tendencies and patterns we see frequently when asking families how their relationship with money started.
Our goal as financial advisors at Pinnacle Wealth is to help families start down path two which starts with having intentional conversations around discovering their personal goals and values.
How do they define True Wealth?
I love being able to walk alongside young couples as they navigate this stage of life – as it is the stage that I am in now.
However, if you can relate more to path one, it is not too late!
Don’t give up. It may take more work now because of choices that were made, but there is no better day to start having those conversations than today.
Whichever path you find yourself on, there can be value in having someone give you sound advice and challenge you to discover your True Wealth.
Discover the WHY behind the HOW.
If you don’t have that, we’d be happy to connect with you to learn more about your personal money story and walk alongside you in your journey to True Wealth.
