In life, we prioritize the things we enjoy doing. Spending time with family and friends, date nights, community service – these are all things that bring us joy.
Then there are the things that would give us peace of mind if we could just tear ourselves away from Netflix to accomplish them. File household financial management in this category.
While many of us want to get our financial ducks in a row, a stark 'confidence paradox' exists. According to data reported by CNBC, there is a massive gap between feeling ready and taking the actual, concrete actions required to secure our financial futures.
We say we don't have time to budget, but the data tells a different story. According to data from the Bureau of Labor Statistics analyzed by The Ascent, only about 3% of Americans do any financial management on an average day—spending less than two minutes daily on budgeting or investing. Meanwhile, we manage to find nearly three hours a day—or roughly 85 hours a month—to sit in front of the television. In short, we tend to think of managing our finances like we think about broccoli. It’s good for us, but ice cream tastes better.
Make a date with yourself
Much like the way that you used to smuggle vegetables into your children’s spaghetti sauce, you can get into the habit of a regular review. Make a weekly date with yourself – or a monthly one at a minimum – to spend with your finances. Then treat yourself to something, like a walk with a friend or a date with The Crown.
Just how much time should you be spending?
It really depends. Do you do manage your family’s finances on your own, or do you outsource it? Do you have complex investment assets or rental properties, or just a 401K and an IRA? Do you do your taxes yourself or do you have a CPA?
Monitoring your finances really depends on your skills, desires, and needs. Some people still use pen and paper, some take advantage of the free tools offered by their bank, and some pay for budgeting software to help them stay on top of things.
If you are getting help from your partner, or if you work in the financial realm, things might be easier for you. Regardless, the first step is just making time to stop and assess what you have and what you’re spending.
Annual financial check-up
We go to the doctor every year for a check-up or at least we take our kids to one. In the same way, your spending plan needs an annual State of the Union.
A budget and spending plan is critical in your 20s and 30s because you are likely going through more major changes in that period of life than any other – and most of them for the first time. But by your mid-30s into your 40s, you may be buying your second house, and odds are you’ve had more than one job. Maybe you’ve received a sizable bonus by now or stock options. Plus, you’re using a CPA.
The numbers are bigger and you’re more experienced, which probably means you need more resources to manage things. But on the plus side, you have a financial cushion now and ramen noodle dinners are a thing of the distant past.
Older you, higher order
Once you have a pretty good idea of your cash flow as well as the wisdom that comes with age in terms of making and adhering to a budget, you can focus on other things like investment assets and life insurance and estate planning. These are things we should be thinking about way before they become necessary.
That’s a specialty of Oaks Wealth Management. Our clients have done a thing or two and know a thing or two and they have some systems in place to make their lives run smoother.
We are one more way for people to outsource stress and anxiety so that they can spend more of their time with their children and career and follow their passions, whatever that may be. We can do it in an integrated way with their existing partners, like estate planners, accountants, and CPAs.
When Statista Research asked Americans how they defined “financial peace of mind,” 57 percent of respondents said it was the ability to live comfortably within their means.
Knowing that all of your financial aspects have been integrated into one consolidated force for a streamlined annual review makes everything else in your life easier too.
Jonathan Kolmetz is a Licensed Professional Counselor, Financial Advisor, and President of Oaks Wealth Management. He holds an MBA, a Master's in Clinical Mental Health Counseling, and specializes in the intersection of family psychology and wealth planning. If your family is navigating the complexities of multi-generational wealth transfer, we invite you to explore how our unique approach combines financial expertise with family systems understanding.