The final six principles
7. We honor one another's (and our child(ren)'s) requests for tools, luxuries, investments and special giving by weighing those requests with our financial priorities.
8. We plan our finances cyclically (monthly), but we speak about them regularly.
9. At regular budget meetings, we reflect on how to become more effective, then we tune and adjust our behavior accordingly.
10. Growing generosity and growing net worth are the measures of our progress.
11. Continuous attention to our spending to net worth ratio enhances our freedom to pursue extra-market activities that accord with our values (the closer we are to financial independence, the less we need to work).
12. Emotional money discussion are only fair when both husband and wife are prepared to speak, listen and not attack.
We honor one another's requests
Sometimes, we have the money to do all the things, but more often than not, we make compromises. These happen in budget meeting where we truly merge our desires from I to we. We prioritize giving first, followed by expenditures that help us solve current problems. After this, we push a great deal of money to the future, while reserving a small amount for luxury spending.
In the future, we plan to invite our kids into budget meetings and to ask them for input on what they would like to spend (music lessons, soccer team, trips to Disney), but we will retain the right to not have to explain why we won't go to Disney even though we've got the money for it.
We plan our finances monthly
During our budget meeting we review our sinking funds to be sure that we're putting enough aside. We review our accounts to be sure that all the income we were expecting came in. And then we decide what to do with the money. Although at first, our budget meetings were tense, they've developed into a bit of a fun event. And as long as we're on the computer, we usually watch netflix afterwards (which qualifies as a date).
We reflect on how to improve
One of our biggest wins recently has been in the area of medical spending. We figured out that my husband can get his prescription medication and his regular appointments through his on campus provider. This is a solid 90% cheaper than the specialist he was visiting before.
Our Measures of Success
Truly, we just want to be faithful with our money, but success metrics help us to understand our long term trends.
Continuous attention to spending to net worth ratio
At a low enough expenditure rate and higher net worth levels, my husband and I can choose many different lifestyles, including a lifestyle where our active incomes are not very high. At this point in our journey to financial independence, I think that we could earn just enough to cover our annual expenses, and never invested a penny more, and we might be in a good situation when it comes time for us to retire (thanks to the power of compound interest). This is the exact path we are considering for the next two or three years, as we seek to just meet our expenditures while my husband completes his degree.
The higher our net worth to spending ratio, the less we "have to" work to meet our financial goals. If we want to pursue work that doesn't pay well (or at all), then we can pursue that work for quite some time without concerns or anxiety about what "tomorrow" might hold.
How we don't fight about money
In case you're wondering, if you are two introverts, this might not be that big of a deal, and if you are two extroverts it might not be that big of a deal. However, I'm an extrovert with an introverted husband. Any discussion where he hasn't had time to think feels like an attack to him. Any discussion where he doesn't answer my questions feels like an attack to me. Therefore, we compromise and have discussions, but we put them off until we're both prepared, but we don't put them off too long because otherwise I would go crazy!