The first step in any path to success is to set a goal and be proud and vocal about it. Tell people your plan and have frank conversations about it. Don’t be afraid to share your goals and hopes with other people. In this case, the goal will be how to use money and assets to create the life you want. If you want to retire early, tell people, especially those close to you. Or if you want to save up enough to take a year off and travel the world, tell people and say it out loud to yourself. This money goal conversation may happen between you and a partner, you and your friends or family, or between you and yourself. But not matter who it’s between, this conversation needs to happen. This is Step One in anyone’s journey to saving for early retirement.
Having the conversation with those important to you, makes the journey more real. Saying it out loud makes your goal come to life and it allows people to ask you about it and hold you to it. Plus those most important to you ideally should support your goals and help propel you forward. (There’s no room for those who hate on your plans.) My husband has obviously been supportive and our friends have been equally supportive as well! They get very excited for us when they talk about our early retirement. Hopefully we can convince one of them to join us in it!
Did I Have this Conversation?
Oh yes, I did. I was in my early twenties when I first started considering what I wanted my 30s and 40s to look like. At that time, I was single so I didn’t have to consult anyone else. I just had the conversation with myself. I grabbed a journal and just wrote down all the things I wanted to do one day and calculated how much money I’d need to do them. It was a very basic plan, but I didn’t have much debt so I figured everything on my list was obtainable.
Plus, what I wanted was really simple. I wanted a little brick house with a dog and to live in the city, where I could walk everywhere. I wanted to be able to travel to Australia, South Africa, and anywhere else my heart pleased without having to sweat about money. And I didn’t want to retire and then have to go back to work. I saw 70 year olds working the cash registers at Target and thought, I don’t want that to be me. It looked so depressing! Finally, I didn’t plan on getting married or having children so I didn’t budget for any of that. I figured I’d just take care of me.
Did My Financial Plans Ever Change?
Of course. In my twenties, I met the man I would someday marry. My plans about getting married changed. I wanted to spend the rest of my life with this guy (still do!). So my plan couldn’t just be my plan anymore. It had to be ours. So when we realized our relationship was serious, we (reluctantly!) decided it was time to have the money conversation.
And having the money conversation was not fun. I would categorize it as an uncomfortable conversation. No one enjoys it. I certainly did not. But it’s necessary because if a couple can’t talk about finances think of all the potential issues down the road. What if he’s never put money into a 401k? Maybe he lives month to month off credit cards. Perhaps his goals for his next decade or his retirement are much different than mine? It’s better to know these things up front. I love surprises, but not on the financial front.
When Did I Have this Conversation with my Husband?
I can remember exactly where my husband and I were when we had this first conversation about finances. It’s easy to remember since we were both super uncomfortable having the conversation. Both of us came from families that didn’t talk about money, so this was new territory for us.
It was bright and sunny with blue skies and we were sitting in the pool at our apartment complex in Las Vegas. The topic wasn’t that specific to early retirement yet. It was more geared towards what we wanted in our 30’s and 40’s. My dreams hadn’t changed from when I was single. I wanted a small house in the city with a dog and the ability to travel. My husband’s goals were similar to mine. Through this talk, we realized reducing debt would make it possible for us to eventually travel and have all the things we wanted in life.
I’ll be honest that I didn’t bring up the conversation about what we wanted our financials to look like in our 30s and 40s. My husband brought up the conversation, although back then he was my boyfriend of just over two years. We had lived together for several months and realized that in order to get all the things we wanted from life, pooling our money would be the best way to make that happen.
The downside was that he came into the relationship with way more debt than I did. Over $80,000 more to be exact. His ask from the conversation was simple. Let’s talk about all the things we want in life, then pool our money to pay down debt, and make those things happen. In other words, my money would go towards his debt and his would go towards paying down my much smaller debt. The dreams of travel, the house, and dog would have to be pushed back a bit. This did not excite me. Like most people, I want things quickly. Patience is not my best trait.
What happened after the conversation?
Up until that. conversation, we’d never even discussed combining finances. Our savings, checking, and loan accounts were very much separate. And just because the conversation was over didn’t mean the decision of what to do with finances became easier. Honestly, I had to think things over for almost two weeks.
Imagine being asked to pay down a lot of debt that didn’t technically belong to you. It’s a big commitment with an element of risk. We weren’t married and I was in my mid-twenties and all I had was someone’s word that we’d pay down debt together and then have all the things we wanted in life. That’s a big leap of faith for anyone. I’ll admit that I was so not excited about pooling money and paying down someone else’s debt. I’m sure my husband wasn’t excited to have this money go towards my debt either. But in thinking it over, I agreed that our plan was worth it to have the life we wanted one day.
So how did I come to this conclusion?
I asked questions and lots of them. We talked a lot about what paying down debt would mean for us. Believe me, once you have that first financial conversation, which is really hard, the next one will get easier. Then we found a plan that we were both comfortable with implementing.
I wasn’t comfortable just paying down debt with no reward. I wanted to have nice meals when we finished paying off a debt and I wanted us to take a nice vacation together when it was all paid down. My husband was on board with this and so we went for it.
Our financial plan probably doesn’t match up exactly with anyone else’s plan, and that’s okay. But everyone should have a plan that works for them.
This seems easy. Why doesn’t everyone do this?
Well, it’s not easy. It’s awkward and uncomfortable. Money is something a lot of people just don’t talk about for one reason or another. I never talked to anyone about my finances prior to having the conversation with my husband in the pool. It’s even harder to talk about money when you are talking about combining finances with someone who could seriously screw you over. Not that most people would, but when your spouse or boyfriend has all your financial information and access to your credit cards, it’s a possibility.
No one wants to talk about money and the sacrifices they may have to make in the short-term to get ahead later on. But do it and do it sooner rather than later. We had our conversation when we were in our mid-twenties and now we are in our mid-thirties and have no debt and can do the things we want. If we’d never had that conversation, who knows where we’d be right now.
What happened after the decisions were made?
Simply put, stick to the plan. If the plan gets uncomfortable, talk about it. Communication is key for success in life. My husband and I wouldn’t be in the position we are in today without having had that long talk in the pool. When we pooled our money, we were very detailed on how we would do it, and we stuck to that plan. It took us almost 4 years for all of our debt to be gone, but when it was, that uncomfortable pool conversation felt like one of the best conversations we’d ever had.