My wife and I have a terrific financial system, so could you.

My wife, Soni, and I celebrated 23 years of marriage recently and I thought I would share what some of the key financial decisions we made along the way and the impact they had on our family.

The themes are consistent:

Figure out what is important to you. Plan ahead. Be disciplined. A little luck helps.

I’ll begin by sharing a couple of choices I made before I met Soni that were big winners. I began working as a financial consultant with an insurance based organization back in 1990. While there, I learned the importance of life insurance (if I ever had my own family) and actually was forward thinking enough to take out a permanent life insurance contract, a few years before I met my wife. As time went by, I substantially increased the death benefit and the premium as we could afford to add more money to the plan.

The most important financial decision I ever made occurred I was while living in Lincoln Park (mid 1990’s), having the time of my life. Like most twenty somethings, I would spend a lot of money going out on the town not thinking twice about how I was spending it. Then one day, I decided this had to stop, I needed to have some discipline regarding my spending. I came up with a simple plan to take a weekly allowance of $300 and that was all I had to spend. That was a pretty large amount back in those days, but it was still less than I was blowing every week. I have been living by the allowance concept ever since.

At the same time, I set up a couple of investment accounts and started having money pulled from my checking account and be deposited into those accounts. Thank goodness I did this because it allowed me to have enough money saved up to convince my then girlfriend, Soni to marry me (1995) and get a nice start for the down payment on our first home.

In the book The Millionaire Next Door, one piece of advise is to “marry a woman more frugal then you”. This wasn’t exactly the advice my father gave me; “Son, it’s just as easy to marry a rich woman as it is a poor woman, so find a rich one.” My wife runs a terrific household, makes things last, looks for great deals and never spends lavishly. It helps a ton that she seldom shops with a credit card in her hand. She and I buy whatever we want with the limited cash we have on hand.

Another good move we made was when looking for our first home (1996). We lucked out and found a motivated seller and wrote them a detailed letter explaining what we could afford to pay for the house ($40,000 under asking) and that the house needed plenty of work. We also were fortunate to buy in 1996, just before residential real estate prices took off. We sold five years later at a 75% increase over what we paid.

Early on in our marriage we discussed the importance of saving a large percentage of what we made (Soni is a hair stylist at Fushion Salon in Glen Ellyn). So we continued with that idea and have had money automatically pulled from our checking accounts for savings, insurance, college, and retirement.

One of my favorite/best financial decisions was to set aside money every year for two family vacations (during Christmas and Easter since 2002). These tend to be expensive trips and if we didn’t plan and save for them they would not have happened. While the trips were expensive the memories were priceless.

We started 529 college savings plans when the kids were born (1998-2001). As we could afford it we bumped up how much we took from our checking account each month to fund these accounts.

In 2012 we refinanced our home mortgage and changed to a 15-year mortgage. I decided that paying off the mortgage loan was better than investing in bonds. It was also another way to increase my automatic savings every month as I increased my monthly payment to pay down debt much faster. We enjoy the countdown to owning our home free and clear.

Fast forward two decades and all the automatic withdrawals from our checking account over the years allow us to have minimal financial stress over our kids future college costs, despite having three kids in college. Our home and life insurance are also on pace to be paid for by the time we are in our sixties.

In summary, money has not been a divisive issue in our marriage because we had common goals, started saving early on, increased our savings as we could afford, spent mostly cash (no big monthly credit card bills) and stayed on course because it was all on auto pilot. We have also been fortunate that the stock market has gone from the 2000’s back in the late 1980’s to around 25,000 today.

Someone famous once said “you make your own luck with hard work and discipline”. I tend to believe that is true.

Best financial decisions I ever made:

Living on a weekly cash allowance
Started early – early twenties
Automated by having money pulled from checking account
Increased saving amounts annually

What was one of the worst financial decisions I made?

Probably the most costly decision I have made was selling Apple stock too soon. I bought it years ago at $3.50 per share and happily sold it at all at $14 (split adjusted). Now Apple trades around $165 per share! I’m glad I made 4x my investment, but sure wish I had sold half and hung on to the other half.

http://www.lifeplanningtoday.com/2016/03/25/the-key-to-financial-success/