Living a Two Income Lifestyle on One Income | 52 Week Money Challenge

I have been procrastinating writing this blog post. I knew it was coming, but sometimes it is just easier to remain ignorant than have to address your problems head on. This journey isn't a success if we just save $13,780 in a year, our goal is to get to the bottom of our financial problems and build the habits that lead to a disciplined financial life. So as it turns out...

Maybe the reason we are really lousy savers is because we are really awesome spenders.

Please don't mind the random pictures of my kids, this week is all about family!

As part of our financial journey we have been working with fee-only planner Sandi Martin to help us get a handle on everything. And although everything might sound like a broad, all encompassing term, trust me it accurately represents the scope of what we need help with. Sandi started by taking our entire banking history in 2013 and spreadsheeted our spending (yes, spreadsheet can be turned into a verb), she then compiled every line item divided them into categories, added some income details and voila, instant perspective.

The only problem with our new found perspective is that we don't like what we see at all. I guess it is simple math really. The reason we can't seem to save any money is because we spend more money than we make. I remember watching the TV show "Till Debt Do Us Part" and thinking, "How can these clowns be spending more money than they are making?" Well... as it turns out, quite easily.

Obviously, something has to change for us, but figuring out what is a lot harder than moving some numbers around on a spreadsheet, clipping some coupons, reading some finance blogs and pretending everything will be alright. We have some serious work to do.

Sandi suggested we start by making a list of "non negotiables" you know... things that we aren't willing to sacrifice on. Here was our initial list (ranked in order of importance).

• Stephanie at home with the kids
• Jackson working with First Foundation
• A Work/Life Balance
• Not Declaring Bankruptcy
• Downsizing our Current House

Welcome To Reality

We have been living a life of carefree spending and now we are being asked what the bone looks like, and how close we are willing to cut down to the bone to fix something we didn't know was broken. Then it settles in. That question, so... how did we get here?

<Insert Pause For Reflection>

Other than not having a budget and living a completely undisciplined financial life, I think one of our biggest problems is the fact that I have been self-employed for pretty much all of my life. Although self-employment can be extremely rewarding, it doesn't come without it's added responsibilities and potential pitfalls. Looking back, our poor money management was covered up by my ability to work a little harder, make a little more money and essentially work out of any bad situations.

Honestly, I never saw our financial situation as a problem because I always knew I could work a little harder and make up for it. The problem is, without sturcture and discipline, the exceptions become the norm and you reach a point where there just aren't enough hours in the day... but you are making bag loads of money, so you feel invincible.

This works great when you are a single man (not really, but the consequences are considerably less), it can work fine as a married couple (kinda), it is tiring when you are starting a family (to say the least), but it absolutely sucks when you are trying to raise a family.

In the summer of 2012, Stephanie and I had the "work/life balance" discussion and decided something had to change. We were essentially a 2 income family living a 2 income lifestyle with both incomes being made by me. Stephanie was able to stay home with the kids which is what we wanted, but I wasn't able to spend the quality time with my family that my family needed. Joining First Foundation was an incredible step for our family. It provided considerably more financial stability than self-employment while still allowing me to use my entrepreneurial nature to grow an awesome company.

The Big Problem

When you trade financial upside (and the time associated with that) for job stability... or when you scale back on time worked for increased time with your family... and you don't address your current lifestyle, the net result is debt.

The corresponding conversation to the "work/life balance" conversation is the "what lifestyle sacrifices are we willing to make to accommodate our proposed new work/life balance" and unfortunately this isn't a conversation we had in 2012, it is a reality we have to deal with in 2014.

And as we are finding out... this is a lot easier said than done. What Stephanie and I thought at the begining of the year was going to be a lengthy exercise on learning to save some money has turned out to be quite the eye opening experience. We are being confronted with the reality that our current lifestyle is unsustainable given our choice to be a one income family. We are going to have to make some significant changes moving forward.

I don't want to drop a heavy, but the truth is, debt sucks. I realize we aren't here to talk about our debt so I am not gonna get into the details, but in order to continue 'saving' money this year it has become very clear that we are going to have to make some serious lifestyle changes.

I guess it's time to renegotiate our non-negotiables.

But you know what... although this might not have been the journey we set out on, if we stick together as a family, this might just end up being the journey we needed.

So with that said, we spent this last week working through these issues and didn't effectively save or make any extra money for the 52 week money challenge. Looks like we will have to double up next week!