Are you aware that your family actually keeps you broke?
Hey Bow Tie Nation, Joseph Hogue here and following up on a video a few weeks ago revealing the hidden way your job keeps you broke which was an instant success, millions of…[rasberry] OK so it bombed but the fact remains there are things in your life keeping you eating ramen noodles instead of filet mignon.
And the biggest hurdle to keeping you from your financial goals, that number one obstacle keeping you broke is…your own family! Those lovable roommates that JUST WON’T LEAVE!
But it’s not in the way most people think. This isn’t about the shopping, the braces or the six-thousand you dropped at Disney to wait in lines for 18 hours.
No, this is something nobody talks about but WILL help you and your family get back on that path to reaching your goals.
In this video, I’ll reveal the three ways your family keeps you broke and how to fix each. Stick around and towards the end of the video, I’ll show you a simple checklist to save more money and get back on track!
Nation, nearly three-in-four couples report arguing regularly about money, more than any other topic and it’s the leading cause of divorce. Those arguments revolve around everything from spending to saving and hiding money.
And if you didn’t read that next line in the survey…60% of couples say they check their bank account more often than they have sex…which is the real tragedy here.
But before we get to those three ways your family keeps you broke and how to fix it, I want to get your input on this. How often do you argue about money with your spouse or friends? Scroll down and let me know in the comments, how often do you argue about money and do you feel like it’s something hurting that relationship?
3 Ways Your Family Keeps You Broke
This first one is the big one, the number-one way your family keeps you broke and it’s because you have no shared financial goals!
This is the big one. Nation, if you get one thing from this video, please, talk to your family about their goals, your goals…find those financial goals you can share because not having them is going to leave you broke.
Think about it. If the rest of your family doesn’t share your money goals…why would they have any motivation to save or invest? They’re not going to see the point of saving.
Worse yet is the breakdown in your family that this causes. You’re going to feel like you’re the only one that cares about saving and investing for those goals. When you see everyone else spending, you’re going to get frustrated, angry and it’s going to lead to an argument.
And even if the rest of the family isn’t spending you out of your goals, it’s still not going to be the support you need when budgeting gets tough. Life is what happens when you’re making other plans and it’s going to get tough saving and investing the money you need. When that happens, you need the rest of your family united around those shared goals if you’re going to make it through!
I’ll show you how to fix these later but the second problem here is, not understanding how personal finance works.
A study by Ohio Stat of more than 6,000 households found in more than one-in-three families, one spouse knew little or nothing about the family’s personal finances. And kids are learning NOTHING in school about how money works.
That could mean that just one person even understands debt, how interest works and investing and that’s going to create problems.
For example, I found out a few months ago that the wife had opened up a store credit card at a local grocery. No big deal, we each have a few separate cards. But the problem was, she had carried a charge of over a thousand dollars on it for three months…paying over 24% annualized interest! She wanted to pay it off herself but couldn’t do it immediately in that first month so decided to pay the interest instead.
We could have easily paid it off and saved almost a hundred dollars interest but she didn’t understand how much the interest was really going to cost.
Last problem here and I’ll show you how to fix all three but it’s just that keeping up with the Joneses mentality.
Now I am blessed that my wife is just as much a cheap ass as I am…but not everyone is so lucky. A survey by OnePoll found Americans spend an average of $1,500 a month on non-essential spending. From over $200 a month eating out to impulse shopping and takeout, and remember this is per person so multiplied for a family.
And this doesn’t even include the big stuff we buy, not because we need it but just to show that we have money. The things like cars and bigger houses that can easily cost into the tens of thousands extra.
And we’re all BROKE! The Joneses and their neighbors, all broke just trying to keep up!
I’ll show you how to fix each of these problems next but first, I want to personally invite you to get the Weekly Bow Tie, our free weekly newsletter with all the stock market news, trends and strategies you need. It’s absolutely free, just something I like to do for everyone in the community, so look for the signup link in the video description below.
These three problems, the biggest factors in your family keeping your broke are surprisingly pretty easy to solve and will actually help bring you closer together. For example, solving the problem of shared goals means creating those goals together.
This starts as simply as sitting down and talking about what you want to do with your money, what are those big goals like retirement, buying a house and even the vacations you’ve always wanted to take.
But it goes beyond this. Really talk about those goals and create a mental picture around each. What’s the perfect house or vacation you’re saving for? And get detailed here, down to what color you want to paint the walls or that house and imagining the family in the back yard.
And this works on so many levels. First, that detail into your goal is going to help you understand exactly how much you need to reach it…how much you need to save. It takes away the uncertainty to give you the confidence you can get there.
Also, that mental picture is going to help motivate everyone, especially when the budget gets tough. It becomes a whole lot easier to sacrifice spending on the little things if you know you’ll be rewarded by the big things.
More importantly though, it brings everyone together in those shared goals. Instead of just one person feeling like they’re the only ones that care, the only ones sacrificing and saving, it’s the entire family working together.
Learning the Basics of Personal Finance
Next here, get your family interested in learning the basics of personal finances. Now, all you out there in the Nation, we love talking investing and money. Not everyone nerds out about this stuff and that’s OK. But having everyone know at least the basics of debt, saving and the power of investing…that’s going to go a long way to fixing your money problems!
Understanding how interest works can help keep family from racking up thousands in credit card debt. Understanding how investing gives you that financial freedom by making money on your money can help motivate everyone to save more.
We’ve got some great videos on basic personal finance I’ll link to in the video description, everything from the power of compounding to credit and investing so check that out.
One more here and I’ll reveal that quick-checklist, and here we need to overcome the Joneses mentality.
This one can be tough because it’s really the value so many of us hold that our worth, the measure of success is the things we own. We want the nicest house in the neighborhood or the most expensive car and the best clothes.
Nation, we all like nice things but understand…the real difference between that Tesla Model 3 and a Malibu is only your ego…and about twenty-thousand dollars.
And the real kick in the nuts in all of this…the Joneses are just as broke as everyone else. The neighbors that you think are doing so much better, that just spent thirty-grand on the bathroom reno complete with golden shitter…they’re up to their eyeballs in debt and fighting constantly about the money!
5 Steps to Create a Solid Family Financial Plan
Now I know these three fixes are a little vague so I want to start you out with an easy checklist, five steps to start right now for creating that family financial plan!
And first is to start that conversation around your goals. This means talking about retirement, kids education, buying a house, vacations…everything. Don’t assume everyone has the same plans or priorities here. In fact, when my wife and I sat down to do this…I was blown away that she prioritized college costs over his and her jet skis…
So talk through those goals, figure out which are most important and have at least one goal you can reach within the next 18 months, something you can save up for and do as a family reward within the next year or two.
Next, with that list of goals, which are compatible for everyone. This doesn’t have to mean that everyone saves for every goal. Have a few family goals that motivate everyone but it’s ok to have your own project. The idea here is to get the entire family around a shared family plan, get everyone behind at least one or two goals.
With those shared goals, you can get a sense for how much you need to save. For things like retirement where it’s a long-term expense, you can multiply how much you’ll need each year by 25 for that goal. For big lump-sum goals like college and vacations, it’s easier because you know exactly how much you want to spend.
Fourth, and this is really where we start to see a transformation in the family finances, talk about how much you have saved and how much the family is saving each month. This is the wake-up call most families need. To see how current spending and saving just doesn’t align with those goals and what has to be done.
And using this process of first talking about shared goals then looking at spending and saving, it’s amazing how well this works to tackle those money issues. Because here, instead of arguing over who is spending what, here you start with that shared goal and it becomes, OK what do WE need to do to get there?
Now there’s still going to be hurdles along the way so you need to evaluate your plan and savings every three- or six months. Don’t expect it to be all rainbows and unicorns with everyone spending less. Resist the urge to turn it into a blame game. It’s not about who’s saving and who isn’t, it’s about revisiting those shared goals and reaching them together.
Read the Entire Personal Finance Series
- Personal Finance Calculators to Make You Rich
- Want to Ask a Question about Personal Finance?
- Necessity and the Mother of Personal Finance
- Learning Personal Finance without Realizing It
- The Personal Finance Lessons Kids Learn When You’re Not Looking
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.