A Doctor Tells: How to Save More of Your Money

Gregory A. Hood, MD

Disclosures

November 30, 2017

In This Article

Getting Others to Help in Your Effort

Step 3: Involve Your Family Members

To use another flying analogy, a two-engine plane is designed to fly in an emergency on one engine, but of course flies best when both engines are not only working but are finely tuned to work together. In the same vein, my wife and I regularly review our annual budget; meet regularly (or semi-regularly) with our financial advisor; and, of course, discuss major purchases proactively.

If you have kids, then your plane is operating with a higher "gross weight." This is important to consider, because the decisions to live more frugally affect everyone in the household and must be shared by everyone. It's also true that their decisions affect your odds of success as well. Should some of your kids take on part-time jobs, for example, their choice will not only add horsepower to the family's financial plan, but it will reduce the gross weight of the "aircraft."

Living frugally is important, but so are the needs and priorities of your family. Winning on the spreadsheet, but making some of your family members miserable because the things that are most important to them haven't been appropriately valued, is not winning. It's another form of losing.

Working together to develop a financial plan, through teamwork and shared decision-making, helps define the goals. Teamwork also helps each of you avoid peer pressure or splurging "in the moment," which will make budgeting and frugality more difficult. (I only partially regret the mint-condition, powder-puff yellow 1971 Jaguar that, because of discussing our family's budget and frugalness, isn't mine today.)

Exposing your children to the pain, anxiety, and uncertainty that you've faced in life will help them as they live their lives and make their own decisions. The protectionism that successful parents often engage in creates a paradoxical trap, from which their children too often don't escape if they haven't been taught the tools of frugal financial success. Without the opportunities to make mistakes, learn, and develop their own discipline, there's little chance that your kids will find the path to financial independence on their own.

Furthermore, because the family's ultimate financial success is a multigenerational team effort, it's imperative that each of you listen to one another. Constructively discussing the reasons given for a purchase outside of the budget creates the opportunity to realize how superficial the reasons for many such purchases are. Doing so will also help everyone realize how a seemingly trivial decision, or a stream of them, can really blow the family off its financial course.

Of course, this doesn't mean that you and your family can't enjoy the fruits of your labor and success. It's fine, say, to go out to dinner every so often, to celebrate an accomplishment or a birthday—or just to blow off steam at the end of a busy week. That said, it may be helpful to set a dollar limit above which a discussion should happen before the purchase is made, versus nitpicking and interrupting each other's day over something trivial. Smaller purchases, such as the occasional restaurant meal, can be reviewed and discussed every week or month, depending on what you're most comfortable with.

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