While most people shy away from talking about money, the fact is that running your home should be seen as running a company. You and your spouse are the CEO’s and CFO’s rolled into one, and you’re responsible for managing the income, dealing with expenses, paying taxes, and investing.
Communicating with your significant other about money can be difficult. When you first start dating, money is pretty much a taboo topic. Even after you’ve been together for a while, asking about your partner’s debts or savings might be seen as petty, disrespectful, opportunistic, or condescending.
We all come from different backgrounds with regards to money. Some of us learned good habits from our parents and continue to follow them. Some of us witnessed good habits but felt it was too controlling and now we overspend to compensate. On the other side maybe our parents were terrible with money and so we are as well, or we learned how NOT to handle money and now we’re awesome at saving and running a budget.
Regardless, odds are your partner behaves differently than you do, and if you don’t take things seriously, you’re going to have disagreements and fights down the road.
Any corporation that takes an approach of “We’ll just see how it goes and not worry about planning or budgeting” won’t be long for this world. Having a similar attitude in the home is what causes many couples to end up thousands of dollars in debt with no plan to get out.
Changing Your Thinking
Most people see themselves as employees. After all, if you go to a job at a company you don’t own and get paid for it, you ARE an employee. At work, someone else is taking care of the strategizing and planning.
But at home, YOU are the president of the company. Your spouse is your partner, but there’s no one above you doing the planning or strategizing.
If you’ve never run a business before, this can be a strange mindset to get into, but use your imagination a little and you’ll get there.
A corporation has shareholders. You have children and/or a retirement to fund. The better you do now the more you’ll have for your shareholders later.
Set Goals And Be Profitable
If your paycheques are disappearing every two weeks and you never seem to be getting anywhere, it’s time to set some goals. We’ve talked before about setting goals, and they are absolutely critical for your ‘company’ to know where your money should go and if you’re successfully getting there.
No company’s goal is to stay afloat and ‘see what happens’. The goal of a company is to produce something, build something, offer services to people. Your home should be the same. Your home as a business should provide you and your family with the opportunities you want and allow you to build the life you’ve dreamed of.
Managing The Details
As CEO and CFO, you don’t have the luxury of hiring managers to take care of the day-to-day details, so you can add another title for yourself. The details are ensuring bills are paid on time, debts are being paid off strategically, income is rising where possible, and nothing is happening to sabotage your success.
Of course sometimes you’ll need an expert, and don’t afraid of hiring one when the need arises. This might be an accountant at tax time or a handyman for a project that’s a little beyond you.
Running your company doesn’t mean cheaping out on things you should be spending money on. Don’t sacrifice thousands of dollars in taxes because you thought hiring an accountant for a few hundred was a rip-off.
Running A Profitable Company
You’ll know your company is profitable when you see your debts shrink, your savings grow, and your experiences become richer. It is a truly great feeling when you realize you just had an entire conversation with your partner about financial planning where there was no fighting or misery. When those conversations truly turn into healthy talks about your future and how to get there, you know you’re on the same page with regards to your life – enjoy the dividends of your work!