Our first annual family meeting

Our first annual family meeting

Yesterday, to celebrate Thanksgiving, Kim and I instituted what we hope will become an annual tradition. Yesterday, we held our first annual family meeting.

Kim approached me with the idea last week. “I think it'd be nice to sit down and talk about our goals,” she said.

“I agree,” I said. I was thinking of the article Matthias shared here in August. Matt and his wife create five-year plans to co-ordinate their shared future. They spend a day drafting couple goals to build their dream life. I've been thinking that Kim and I should do something similar.

So, yesterday morning over coffee, we sat down for our a family meeting. We talked about the current state of our household — and we talked about where we'd like to steer things in years to come.

J.D.'s Rocky Year

“It's been a rocky year for me,” I said, although Kim already knew this. “I've been fighting anxiety and depression since March. I've had a few patches of amazing productivity and good self-worth, but I've spent a lot of my time trying to keep from drowning. Metaphorically.”

“That's true,” Kim said, “but you're making good changes. You're exercising. You're drinking less. You're seeing friends more often. You've stopped wasting time on videogames. And you have your big project coming up.”

“Right,” I said. I've been recruited by Audible and The Great Courses to create a ten-part (five-hour) series on financial independence and early retirement. “That work is going to take most of this winter. The first five lectures are due at the end of January. The rest of the course is due at the end of March. I'll fly to D.C. in early May to record the audio.”

“Will the project pay enough to fund your lifestyle?” Kim asked.

“Sort of,” I said. “It's four months of work, and it'll probably end up funding about four months of expenses. That's not bad, but it's not great either. But I'm not really doing it for the money, you know.”

“How are your finances?” Kim asked. Believe it or not, in our nearly eight years together, we've only talked about money in-depth a couple of times. We trust each other, so we haven't felt the need.

“Things aren't as good as they were three years ago,” I said.

“What do you mean?” she asked.

Notes for family meeting

“Well, when we returned from the RV trip in June 2016, I felt completely at ease financially. I had enough saved that I never felt like I had to work again. I could do what I wanted, when I wanted.”

“That's not true anymore?”

“Not really,” I said. “You know I'm not squandering my money, obviously, but let's look at the numbers. Over the past three years, I've spent $400,000 on a bunch of big stuff: buying back Get Rich Slowly, remodeling this house, those investments in other businesses. I'm not blowing the money on gambling and hookers. These are all financial decisions that made sense in the moment, but which have left me feeling pinched.”

“Are you running out of money?” Kim asked.

“No, not really,” I said. “I just don't have as much as I want. Look. I'll show you the numbers.”

In 2016, I had about $800,000 in regular, taxable investment accounts. Today, I have $271,119. “This is the money I have to live on until I turn 59-1/2 in nine years,” I told Kim. “Three years ago, I had enough saved that I could spend $67,000 per year. Today, that's down to $30,000 per year.”

“But the money you spent on Get Rich Slowly isn't dead,” Kim said. “That gives you an income, right?”

“I haven't taken any money out of the business yet,” I said. “It's earning about $5000 per month in revenue. But then we have expenses. And after expenses, Tom and I share profit. But neither of us had taken any profit yet. We have about $12,500 in the business bank account.”

“What about your retirement savings?”

“That's doing better,” I said. “I have almost exactly $500,000 in my retirement accounts. That should continue to grow over the next decade. Plus, the house is worth about half a million too, and I own that free and clear.”

“So, why are you worried?”

“I can't explain it,” I said. “It's just the next nine years I worry about. And I know that the worst-case scenario is that I find work at Starbucks for a few years. My net worth is still over $1.6 million, so that's great. It's just bridging the gap between now and retirement that concerns me.”

Kim's Quiet Accumulation

“Now,” I said, “how are you doing with your money?”

“I don't have as much as you do,” Kim said, “but I never have. I don't know if I ever will.” She pulled up her account information on her laptop.

“I just added a fourth work day each week,” she said, “which means I'll now be earning $5500 per month. I'm putting 22% of that into my Vanguard retirement accounts. I've been saving a similar amount for my new car and for other goals.”

“So, you're saving nearly half of your income?”

“More or less,” she said. “And now I have nearly $200,000 saved for retirement. But I've been feeling really pinched lately. I know that's because I've been saving so much, but I don't like it. I know it'd help if I spent less. I just don't know where all of my money goes.”

“You don't like tracking it,” I said.

“I hate tracking it,” she said. “I hate tracking money. I hate tracking calories. I hate tracking anything.”

“Well, a lot of your money this year has gone to medical expenses,” I said. Kim had knee surgery at the end of March. She's maxed her out-of-pocket expenses this year. (I have too!)

“That's true,” Kim said. “But I still feel like I'm spending too much.”

“I was just looking at my yearly numbers in Quicken,” I said. “At the start of the year, I cut back hard on a lot of my extraneous expenses. And next year will be the last year that I buy Portland Timbers tickets, so that'll cut even more. The biggest splurge I still carry is food. I spend a ton on food. I'll bet you do too.”

“Maybe that's something we should address in 2020,” Kim said. “We could find cheaper places to eat out. We could choose happy hour instead of dinner. We could drink less. Let's work on it.”

Family Goals

“Okay,” I said. “That's where we are at the moment. Where do we want to be? What are our goals?”

“In the immediate future, I need to buy a new car,” Kim said. She drives a 1997 Honda Accord that has been limping along on its last legs. “I plan to test-drive a RAV4 this weekend, if you want to come. I have nearly $20,000 saved for that, plus USAA has pre-approved me for a $10,000 auto loan.”

“Here's an idea,” I said. “You're paying me $500 each month for the house. You've paid a total of $13,750 since we moved in. What if you stopped paying me and I gave you back that money?”

“Why?” Kim said.

“It'd help you with your cash flow,” I said. “And it'd make it so you didn't have to borrow to buy the car.”

“But it'd hurt your cash flow,” she said. “Plus, I like the idea of buying into the house. I like having ownership.”

“I get it,” I said. “Just consider the idea. What are your long-term goals?”

“I really want to save for a second house,” Kim said. “I want us to buy a beach house that can double as an investment property. I've been talking about this ever since you and I started dating eight years ago. It's important to me, but we haven't done anything about it.”

Kim changed gears. She asked me about my future. “What are your plans?” she asked.

“I don't have any specific long-term goals,” I said. “I like our life. I like our family. I like where we live. The only two concerns I have are my mental health and my financial situation until I reach retirement age.”

“You're working on the mental health thing,” Kim said. “What can you do about the money?”

“My top priority is to increase my income,” I said. “I'll check my spending again at the start of the year, but I'm sure it's down from where it was twelve months ago. It's my income that's the issue. I have enough saved that I can draw about $2500 per month, but I'd rather not touch that money at all. I'd rather keep it for retirement.”

“So, if you want more income, how are you going to do it? You could find a job, right? Or make more from Get Rich Slowly?”

“Those are the two options,” I said. “And I don't really want to find a job. I truly believe I can make enough with the website to support myself.”

“How are you going to do that?” Kim asked.

“I think there are three things I can do. First — and most importantly — I can publish more regularly. I don't want to wed myself to a schedule, and that's fine. But I think I'd be happier (and so would the readers) if I published more often than three times per month!”

“What else?” Kim asked.

“Well, Tom and I both believe that if we'd finish the redesign, that could help increase income. We've been working on the new site for two years. Lately, I've been the hold up. It's stupid. We need to get it out there as it is, then worry about fixing things after we launch.

“And the final thing I could do to make more money is to build out profitable sections of the site. I've been reluctant to write certain articles because I feel like it's ‘selling out'. But it doesn't have to be. If I do it my way, in a way that helps the readers, it can be a win-win.”

“Then do it,” Kim said.

We finished our family meeting by touching on some miscellaneous topics. We agreed not to take any major trips for a couple of years, for instance, so that we can both focus on saving money. (Instead, we'll make excursions in and around Oregon.) And business travel killed me this year. I was miserable. I'll do less of that over the next year or two.

Final Thoughts

In all, Kim and I spent two hours discussing our current situation and talking about the future. It was awesome. We both came away feeling energized about our plans. We didn't find all of the answers, and that's okay. We feel like the discussion has put us on a shared path.

After our money talk, we tackled the second part of our family meeting. We walked through the entire house — then across the entire property. As we went from room to room (and spot to spot), we drafted a list of projects for the coming year.

House goals from family meeting

Finally, we spent the afternoon putting dreams into action. While Kim cooked Thanksgiving dinner and tackled some of the house projects, I cleaned out our storage shed, then thinned my wardrobe. (For years, I've been wanting to move to a more minimalist wardrobe, but keep finding reasons not to. Yesterday, I finally gave in and boxed up a bunch of clothes.)

Today, as soon as I finish this article, I'll transfer our list of “house goals” from paper to digital. Tomorrow, we'll test-drive a new car for Kim. In the weeks and months ahead, we'll support each other as we work toward our individual and shared goals.

Our first annual family meeting was a success. I look forward to repeating this process again next year!

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One Frugal Girl
One Frugal Girl
8 months ago

J.D. – I love this topic! My husband and I have been participating in annual financial meetings since 2006. Every Valentine’s Day, (aren’t we romantic), we sit down to discuss our finances in ridiculous detail. We prepare a net worth and cash flow report prior to meeting. Then, (and this in my opinion), is the most important part we each create a list of goals. This can be stuff like take college courses, replace furniture, travel to Alaska whatever you want, the sky is the limit. Write down the goal and assign a time frame to it. We break our… Read more »

Frogdancer Jones
Frogdancer Jones
8 months ago

I enjoyed reading this very much.
Being single, the only person I have to talk about my future goals is myself. (Luckily, I’m a damned good conversationalist!)
It was really interesting to see how you both brought up issues but then supported each other.
Hope Kim finds a great car!

Megan
Megan
8 months ago

J.D, this was SO HELPFUL. I have annual meetings like this in the business I run with my sisters (which then flow into quarterly, monthly and weekly strategy check-in meetings), but I guess I’d never thought of doing it in my family.

Thank you also for writing out your meeting verbatim. So much more helpful than if you’d just told us about the principle!

Michael Clark
Michael Clark
8 months ago

Is Kim your wife? I can’t recall the situation. If so, it feels like something is off in this discussion. It almost feels like two roommates. As a couple, the goals are a set, so the finances are a set. Not two separate things.

Sabine
Sabine
8 months ago
Reply to  J.D. Roth

That’s very sad. For me marriage means sharing everything. But we’re all different. So I wish you luck with your choice.

Sam @ Financial Samurai
Sam @ Financial Samurai
8 months ago

Sounds like you guys had a great heart to heart discussion. It’s a good reminder for all of us to do the same. I totally understand you regarding feeling the money crunch after you spent $400,000 on your home and this website. At the end of the day, you logically want a positive return. Otherwise, you’re going to feel off. How about just take some profits to make yourself feel better? $5000 of revenue a month is great. I feel the same way about trying to monetize my site by the way. I just really like to write. It bums… Read more »

Selena
Selena
8 months ago

I was going to do a lengthy post about MVP (minimum viable product), but someone else has done it for me:

https://blog.crisp.se/2016/01/25/henrikkniberg/making-sense-of-mvp

I highly recommend for you to read it.

El Nerdo
El Nerdo
8 months ago
Reply to  Selena

That was a good read, thanks for posting.

Fred
Fred
8 months ago

2 thoughts. Is that 3K credit card a snapshot of a balance that you will pay off in full on the due date? Given your financial savvy I assume you’re not carrying a balance .

A part time job can do more than improve your cash flow. It’s a place to forget self reflection as you focus on the task at hand. You’ll enjoy regular interactions with certain coworkers. Everyday you get a measure of satisfaction at achieving the goals at hand.

El Nerdo
El Nerdo
8 months ago
Reply to  J.D. Roth

Wait, you’re not working at the box factory anymore? I think I read one recent article of yours where you mentioned that you were working on the books there. Personally, I don’t think you need more distraction from the writing + rebuild + courses + etc. As if that was not enough work, adding yet more busy work can be a form of procrastination on important/ real goals. Time to apply ass to chair. But if you need some social contact and regular office habits, you could put some days at a coworking space somewhere… or maybe eventually turn your… Read more »

Eileen
Eileen
8 months ago
Reply to  El Nerdo

Was going to ask about the box factory job as well.

FoxTesla
FoxTesla
8 months ago

Does driving a Rav4 mean the Tesla Model 3 dream is dead?!? Or is she going to use the Rav4 as a stopgap until the Cybertruck is ready…

Deb
Deb
8 months ago

This is not meant to be judgmental in any way, but I am curious about why your finances and Kim’s are totally separate? This is a foreign concept to me but I am hearing about it more from younger people who do it. My husband and I have always comingled our finances and I think we benefit from the power of larger balances. (I realize that it can’t be done with retirement accounts.)

Karis
Karis
8 months ago
Reply to  Deb

Definitely not just a younger person thing! My husband and I, both Millenials, share all of our finances, like you. We think of our separate incomes as shared, and have budget meetings at the beginning of each month to think about how we plan to use that income in the new month.

mary w
mary w
8 months ago
Reply to  Deb

JD and Kim aren’t married so they wisely keep finances separate

Deb
Deb
8 months ago
Reply to  mary w

Thank you for clarifying for me Mary! That’s a very good reason!

Carmine Red
Carmine Red
8 months ago

This is a GREAT idea! We used to have weekly family meetings when we had a lot going on, and because it was always over dinner at our favorite Japanese restaurant everybody looked forward to it.

We haven’t had one in awhile, (we got out of the habit and have been cutting back on eating out) but as we approach the next year it’s a super good idea to get everyone back in sync.

I’ll be calling a family meeting for my folks ASAP!

JanMN
JanMN
7 months ago
Reply to  Carmine Red

I like the Japanese restaurant setting! My husband and I have been having weekly meetings for the past several months as a way to track and handle decisions in renovating our fixer-upper. This cuts down on endlessly discussing (sometimes heatedly) about the house. Now the meeting has grown from “house stuff” to several additional categories, such as – finance (any big purchases coming, how’s our monthly budget tracking), food menu for the week and future (brainstorming on future travel or fun, cheap dates locally etc).

We totally enjoy this meeting now, and our day-to-day relationship is better for it.

Jen G
Jen G
8 months ago

I always appreciate how transparent you are with your finances. I know that everyone’s situation is unique, but it is helpful to see where other people are with their finances. Plus, it just makes the advice you do dispense that much more meaningful. It is hard to listen to financial bloggers who don’t disclose their own financial info (what, do they think I’m going to find them and rob them?)

Financial Freedom Countdown
Financial Freedom Countdown
8 months ago

It’s great to have this level of transparency in your relationship.

I thought you bought the site for much less than you sold it for. Wouldn’t that money be invested and provide a constant source of income?

Jennifer Gwennifer
Jennifer Gwennifer
8 months ago

Great article, J.D. Looking forward to the relaunch. Just got married in October after a cross country-move to the West Coast this summer. All of sudden we went from me making twice his student income to him making 3x my salary in a very expensive city. We decided to split rent proportional to income but shared expenses 66/33 and are keeping all finances separate except one joint debit for bills. I do worry about long-term financial goals as I’m a over-saver for the nebulous future and he’s a spender on experiences and travel now. Also debating joint vs. separate tax… Read more »

Bill R
Bill R
8 months ago

Loved the article, communication is everything. My, 2 cents, if Kim really wants to save money I’d suggest checking out a used car. I’m just got my second car from CarMax and will never buy new again, you pay a huge premium. We paid 17K for a 2015 prius with under 20K miles, a lot for a used car but it is in perfect condition. Transacting with car dealers, who by definition have mastered the art of manipulation, is also a losing game. CarMax is not exempt from games but they are transparent about it, after the third no on… Read more »

Flying Robot
Flying Robot
8 months ago

Good article. My wife prints out cash flow and financial statements each month, and I use them to tweak our retirement planning spreadsheet. She likes tracking stuff, I like forecasting. We need to work on the goals part, I think. Our immediate financial goals are to fund a trust for our oldest child (special needs), pay for college for our other child, and well, we have enough retirement funds that once they double again we’ll hit our number. We want to help that along and fund the gap between now & normal retirement age so we hit FI in about… Read more »

FM Rommert
FM Rommert
8 months ago

J. D., yes, you certainly can make enough with the website to support yourself. In my perception, you belong to the leading thinkers about money topics in the world, and you do it in a very understandable, helpful way. You should concentrate on your strengths. If you build up some product, I am sure it will be useful. And you will do it your way. If the price is reasonable, your readers will be happy to pay for it – in order to improve the own financials skills and habits – and to support you. Give it a try and… Read more »

Teinegurl
Teinegurl
8 months ago

I also want to know if you are working at the box factory? Also would Kim share with us when she makes her final decision on a car? I would like to have a family meeting with my boyfriend. He’s so closed off to money conversations but slowly I’m opening him up more and sharing more with him in hopes of learning and helping each other reach our goals. It would be great for 2020 to really buckle down. Also how about being a personal finance coach or something like that? I would love to hire you to just guide… Read more »

Peg
Peg
8 months ago

I enjoyed reading this post! I’m 59, husband’s 65, and this year has been total upheaval. He was forced to retire right around his birthday due to poor health (employer was probably concerned-rightfully so-if he truly could safely perform his very physical job), which means he started Social Security/Medicare, and I lost health insurance, because I was on his plan through his job (I’m self-employed). As a side note, I, too, have thought more than once about getting a part-time job at Starbucks. I was completely shocked when I recently heard-from a reliable source-that Starbucks will not generally hire anyone… Read more »

Mid America Mom
Mid America Mom
8 months ago

What a nice idea! I know you took some major trips (some with your cousin and he has limited time with us so spending now IS the only option there). Trip to the coast for whale watching is a nice activity. Note on mattresses. I am not in your area but some charity thrift stores sell NEW mattresses for less in their store. A split mattress king is two twins 🙂

Steve F
Steve F
8 months ago

I feel a connection to your situation. I lived in West Linn from 2000-2004. After my energy marketing/power plant developer employer went bankrupt in 2003 and let me go, I started a home-based consulting business. The company gave me some parting gifts at separation, but I also had a mortgage, as well as a non-working spouse and four kids to support. Fortunately, I was able to use my contacts to build the business quickly and avoid having to dip into investments to cover living expenses. It didn’t take my wife and me long to realize that West Linn was too… Read more »

Dan
Dan
7 months ago

Thanks for the article and transparency. One question I have, mentioned by Kim, is tracking expenses. Perhaps it is written elsewhere, or someone else has a suggestion; however, this reminded me of my wife. As we try to control spending, she hates tracking spending, tracking calories, etc. Any system that anyone has seen?

Brooklyn Money
Brooklyn Money
7 months ago

Add me to the what happened with the box factory crowd. Also wondering about renting an office what you will be doing with it? For me personally, I would not want to incur a new expense unless it would lead to new revenue.

This is a great post. Sounds like a really healthy mature relationship that is mutually supportive.

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