Guest Post from Ryan’s Wife, Chelsea: My Money Mindset
This post was written by my wonderful wife, Chelsea, about the evolution of her mindset around money.
I remember having a conversation with Ryan when we were first dating, saying I just wanted to be able to go buy groceries without: 1) checking my bank account balance first, and 2) having a calculator out the whole time to make sure I didn’t overspend.
Ryan talks a lot about cash flow, and I love the grocery store example because it’s relatable for just about everyone. Everyone eats food, and most of us go buy that food from some kind of store, and if you’re like me, you’ve gone through periods of your life (like college) where you had to sacrifice nutrition for affordability.
Before I met Ryan, I was entirely hands-on with my finances. I was raised with a scarcity mindset when it came to money: I have two incredible hard working parents, who were pretty open with me and my sisters about our financial situation. I can still hear my dad’s common refrain of: “you think money grows on trees?” after asking for some cash to spend at the mall.
Suffice to say: I wanted to know what my money was doing 100% of the time, so that I didn’t run into any messy surprises. The sentiment there is pretty good—I’m not the advisor here, but I know it’s smart to have a handle on where your money is going. The issue was, my scarcity mindset made me normalize my bank account going all the way down to zero before my next paycheck.
If I saw money in an account, I made sure I found something to spend it on.
Not exactly what Ryan is talking about when he says to tell every dollar you make where to go!
Our first conversations about combining our finances after getting married were really vulnerable and emotional for me, because he kept harping on this automated transfers thing.
I’ll be honest. The idea of setting up automatic transfers to move my money around terrified me.
What if I mis-judged the timing or amount, and because everything was automated I ended up over drafting my account?
I was not a fan.
Ryan wasn’t going to budge on this though, so here’s what I did:
Looked at my current bank account balances
Determined the date and amount of every bill that needed paid
Determined the date and amount my monthly paychecks
Added in the dates and amounts of each automatic transfer
I took all of this, and mapped out one month of all the action in my bank account: the starting amount, the days money was withdrawn/transferred elsewhere, the days money came in, and made sure there weren’t any days that I went negative.
That was the turning point for me. Seeing it all on paper helped me feel confident enough that I was willing to give it a try.
This whole set-up became incredibly valuable for me, because we even set up a separate bank account just for my own personal spending. My very own account to bring down to zero every month!
In my opinion, this is the best part about having a cash flow system. I get a paycheck, and the automatic transfers take care of everything without me needing to lift a finger:
A chunk goes into savings
A chunk goes into our “bill pay” account where all our automatic bills are charged to (phone, rent, utilities, etc)
A chunk goes to our joint spending (groceries, dates, house stuff, etc)
A chunk goes right to me, and my own personal spending account
Now I don’t have to look at the bank account before I go buy groceries. I sometimes don’t even pay attention to the total amount (the height of luxury, am I right?).
I don’t have to worry when I buy a pair of jeans that I’m accidentally using money that should be allocated for bills.
So here’s my pitch: if you’re like me, and you have a habit of spending all the money you bring in, take some time to map out your earnings and expenses and get things automated. Once your spending money is fully separate from your savings and bills, you’ll find it so much easier to start moving your finances in the right direction.
