Just after we were married, my wife Lianne and I were fortunate enough to spend some time with a financial advice group. They helped us shape our thinking regarding our finances and our future.
Like all young couples, we wanted to be able to travel, buy a home, have a family, for Lianne to be a stay at home Mum, send the kids to good schools and to be debt free as early in life as possible. We knew that being debt free would afford us so many more options in life but to achieve it we would have to be purposeful in the way we managed our finances.
Dreams becoming reality
At the heart of the financial advice we were given, was the importance of living to a budget so that every month we had surplus funds. This proved to be the best way of how to save money, pay off debt and invest – a lesson Grandma had drummed into me 10 years earlier.
While it hasn’t been without its struggles, Lianne and I agreed from early in life that we would always live to a household budget, we would save for the things we wanted and only borrow a modest amount to buy a home. Within a few months these simple principles had become healthy financial habits that have formed the foundation for every financial decision we have made and every goal we have achieved.
After 9 years of saving money and investing we bought the house of our dreams – close to good schools, work and family (though not too close!). Within 7 years of buying our home we had it paid off and were in a position to buy into the financial planning firm I worked for.
I know it sounds easy as you read it but don’t make the mistake of thinking we were earning high incomes. The reality is our desire to have Lianne stay home with the kids and a career change for me at age 30 caused us to struggle for many years. It was our commitment to living to a budget and buying only what we could afford to pay cash for that built the platform for where we are today.
For the first 14 years of our eldest daughter’s life, holidays consisted of camping trips to the coast. They were holidays that were cheap but amazing fun just the same. Cheap holidays allowed us to achieve a debt free life faster.
Last Christmas we achieved a lifelong dream to have a white Christmas in Europe; our kid’s first overseas trip and what an amazing trip it was. It had been our stated goal for many years that the year after achieving ‘debt free’ we would reward ourselves with a ‘white Christmas holiday’.
Next year we are hoping to take our children to see fresh water and sanitation projects that we have had the privilege to support in Cambodia and Kalimantan. No doubt that after a trip to Europe, this trip will be a real eye opener for all of us. It’s sure to help us recalibrate our interpretation of ‘needs’ and ‘wants’. I am sure it will also provide us with a fresh perspective on what power we have to positively impact the lives of others when we consistently spend less than we earn.
How a budget can help
Regardless of whether your dream is to own your own home, start your own business, travel the world, get out of debt or give generously, the foundation to achieving these thing is a good budget. You need to commit to spending less than you earn and buying only what you can pay cash for. It’s not rocket science but I guarantee it works.
As a budget coach I have the privilege to be working with a number of young couples on their family budget and individual budgets. They are powering their way towards paying off debt and achieving other significant life goals. This is thanks to their commitment to living life to a budget.
The decision is yours
So, what are your dreams for your life? What would you ideally like your life to look like in 5 years, 10 years or 20 years’ time? What are you doing to make those goals reality? If you aren’t living to a budget, chances are your goals will remain unfulfilled dreams. The good news is; it doesn’t have to remain that way.