Ken: Happy day to you. This is Ken Kaufman, and I’m thrilled you’re here for episode number 65, 22 Years of Marriage. Now, we have a special guest with us today. I am excited to welcome my wife, Angela, to the episode.
Angela: Thank you. I feel so welcome.
Ken: So what does marriage have to do actually with net worth, especially 22 years of marriage? The answer I came up with, it’s actually everything. Because when you go back to our beginning, when our lives came together and merged, we literally had nothing. I was starting a business and I took out a $5,000 loan from my father. I had an old car that I actually sold for a couple of thousand dollars so we could put some money on the bank. My wife had a car, small loan, pretty low monthly payments for another year or two. We rented a dumpy apartment for $500 a month, and by we, I actually mean just me. I made a very poor decision on that, and I basically lost all rights to ever have any say or influence with our housing and real estate decisions since. So it’s been 22 years since I’ve really been too heavily involved in that process.
Angela: Let’s just say we called it the pit.
Ken: It was cheap. It was not great. It did not go well. So my point is we started with nothing. And we’ve, throughout our 22 years of marriage, been working on how can we try to build our net worth together. And it’s definitely a partnership. It’s definitely a process that we go through. So I asked my wife, Angela, our guest today, what are the main things that stick out to her, the key lessons learned. And if maybe some of you are slightly behind us in terms of how long you’ve been married, or maybe you’re just getting married, or maybe you’re not married yet, these are some things that maybe you can implement and make sure that you do a good job with even earlier than we did in the process, and hopefully get yourselves ahead further than we’ve been able to. So, Angela, when we talked about this, the first thing that you talked about was the bucket system. Can you explain what the bucket system is and how it works and why it’s made such a difference in our ability to succeed financially?
Angela: Yes. So Ken runs the finances. We’ll just say that from the very get-go. But we definitely have had conversations together about them. So we have all these different buckets. So one would be our tithing. We pay 10% to our God before anything else happens. And then we have a percentage that is our giving fund. I actually have an Angela fund money. And every month, a certain amount of money goes into each of these different buckets. And we have one for our house, we have one for savings, we have one for clothing, we have one for the laundry that whitens my husband’s shirts so I don’t have to iron them every day. So we have all these buckets that we are continually putting money in. So for example, when the coronavirus hit and my son had a birthday, I had a couple hundred dollars just sitting there that was waiting to be used on his birthday. So I didn’t have to say, “Where is the money coming from? Is it gonna come, you know, does that mean we eat less this month or whatever?” It was just like, “Well, this is his money, and we can spend it on his birthday. We can still have a birthday for him.”
Ken: And that was the month, specifically, you’re talking about when we didn’t have an income coming in, because I wasn’t able to make a paycheck for a month because of the significant reduction in force that my employment went through. So the second thing you mentioned when we talked about this, besides the bucket system, is to have a reserve. Talk about…so what’s the difference between your bucket system versus having a reserve? And why has a reserve been so helpful and why do you think it’s so critical in helping people succeed financially?
Angela: So it’s just nice to have money put away for something and to be kept for the future, right, just savings for whatever it is that comes up. Whether it be the birthday, whether it be whatever it is you need, paying rent, paying a mortgage, paying, like, all of a sudden, we had extra children at home. We had two other children that we were not planning on living with us. And one moved home in March and the other one moved home in April. And we needed extra money for groceries, and we had to buy a bunk bed, because we couldn’t fit them all in the same room. When we had eight kids at home, we were living in a different home. Now, we’re living… Anyway, we had to buy another set of bunk beds. And you know, there were just expenses that came up, and we were not planning on those, but they came up. So it was just nice to have a reserve, to have extra.
Ken: And one of the interesting parts of that is it’s a reserve with no label on it. It’s a reserve that says, “Hey, if something goes wrong, if something happens that you’re not expecting, this is just there as a nice backfill. And if you don’t end up needing it, great, you can use it for something else down the road. So the third thing you brought up when we made this list together was insurance. Walk me through how has that been important over the last 22 years of marriage, and kids, and everything that’s happened in our lives, and what difference has that made for us financially.
Angela: So insurance has been ginormous, whether it is a year ago when my son’s finger got slammed in the door and he had to have surgery because we broke his pinky finger or if it was, you know, having babies. For example, our first baby, when we had no money, I paid a $10 copay for the baby, because I had school insurance. And that was ginormous. We’ve had, you know, business insurance that saved our hide on occasion. And home insurance. We had a flood that…
Ken: A flood?
Angela: We’ve had multiple floods, but we had one alone that was a three-level flood, a three-level home flood, meaning, it started from the third floor and went down to the main floor and then went down to the basement. And everything got ripped out. Within 10 minutes, all of a sudden, my house has holes in the walls and fence and, you know, just crazy stuff. And we paid very little money for that home fix.
Ken: It’s just a small deductible, yeah, and then the insurance paid the rest.
Angela: And it was thousands and thousands and thousands of dollars for things like that. So insurance has helped us a ton over the years.
Ken: Awesome, yep. Auto insurance, general liability insurance, business insurance has made a big difference. I’ve totaled a few cars in our day. It’s made a big difference. The fourth item that you mentioned and brought up that you feel like is a main, main reason for or main lesson learned over 22 years of marriage is having this long-term perspective. Can you walk us through that? What does that mean, and how has that helped us?
Angela: So when we had been married, maybe less than five years, for sure, and we had two little kids, I was a stay-at-home mom and Ken was earning what I thought was great money at the time. Now it’s almost nothing compared to what the difference in what he can make now, his ability. But at the time, it seemed like a lot of money. And he came home and told me he wanted to go back to graduate school. He wanted to get an MBA. And I thought that was just gonna send us back. I thought that was the dumbest financial decision we could ever possibly make. But he seemed convinced that it was a really good idea and it was something he really wanted to do, that he was gonna hit a ceiling in his career if he didn’t do this. And I really remember thinking that was gonna set us back. And it was by far the best emotional decision, financial decision, career decision, everything that we’ve made. It’s had a huge impact in our lives moving forward, and it was a great blessing to us.
Ken: Yeah. We sold the house that we’d bought just a few years earlier. We had two young kids at the time. We went back down to the one-car system and spent a lot of money to move ourselves across the country to go back to school. And the interesting thing is that we actually loved that year. It’s one of our best years. And we accomplished some things we didn’t even think were possible. And I think the main point that I’d take away from it is sometimes you have to make investments and take a chance on if they’re gonna pay off. And in this case, I think it ended up paying off significantly, you know, just like you said. All right. The fifth one is about communication. What role has communication played in how we’ve, over the last 20 years, and even prior to getting married, in the dating and courtship process, what role has communication played in us, you know, getting aligned, to try and stay aligned, and in trying to keep, you know, moving forward with our goals to improve our net worth?
Angela: So, to me, love is a long conversation. Every Friday night, for most of our marriage, we’ve gone on date night, and it’s just a time for us to talk. I even now make him put his phone away for that hour that we’re at dinner so that we can just sit and talk. And there are lots of times he’ll put it away anyway and we talk. But during date night, we both put our phones away so we can just chat.
Ken: Okay. Hang on, I have to interrupt your…okay. So during COVID, it was a little crazy, and I was getting a lot of messages and a lot of things. So it took a lot of discipline to put it away. I’ve generally had it put away, but we were working on a 24-7 schedule there for a few months. So let’s slow down a little bit. I think we’re on, like, 27 at this point, but it’s working. So, sorry, I didn’t mean to interrupt your thought process. You were talking about what this role of communication in marriage.
Angela: So love is a long conversation, right, and money is something you talk about over and over and over and over. But it doesn’t have to be negative, it’s just something that you’re continually updating. So in the very beginning, we talked about our bucket system. So one of the ways that we’ve gotten the most aligned is in what we call the 5-10-15 plan, because it was always this big huge debate about what we were gonna pay, how much we were gonna pay for tithing, how much we were gonna pay to help others, how much we were gonna pay ourselves, how much we were gonna pay for taxes. And we essentially decided a percentage. We were gonna pay in percentage. So if we make more money, we pay more. If we make less money, we make less. And that has been something we have always done in the last few years. That was not the way we did it in the first many years. So I think there was lots of years of debate of how much do we help other people, how much do we give to the poor, how much do we save for ourselves, how much do we do?
Ken: And I think, the debate, we were always aligned from day 1 about we pay 10% to God. It was more about what should we be saving for ourselves for the long term and what priority does that have over contributing and donating to those less fortunate than us. And in trying to give back in that way, I mean, there’s plenty of ways to do it, but this is just the financial part of the conversation. So I was, for a long time, because you’ve got a probably more charitable kind heart than I do, but you were always pulling for, “Let’s give money to those who need it,” and I kept saying, “We need to save more.” Because we have this long-term, we have this big retirement where we’re paying our future selves by setting money aside. And so the debate just went back and forth of what is the right balance between those two. And that’s where…yeah, it’s really just been in the last few years where we’ve really kinda solidified, and it’s not that it’s not a discussion point anymore, it’s just we’ve made that decision, and we just execute on it, and we are comfortable with it. Now, at some point, if one of us gets uncomfortable with it or we have any challenges with it, then we would just communicate and try to talk about it and work it through.
Ken: Is that fair way to characterize it?
Angela: Yeah. But it came after lots of conversations, right?
Ken: Oh, yeah, years. Years and years. Like you said, I mean, 22 years of marriage, and it was around year 18 or 19 where we started to, like, figure out how to get aligned around it completely.
Ken: And we would do things where we would put more money to our retirement than you necessarily wanted, but I wanted it, and so you’d kinda go along, or we contribute more to this or this of that you wanted and I’d kinda go along but never…I always kinda struggled with how to get the right balance. So it just took a lot of iterating to get to the right balance.
Angela: But the percentage system works great because we’re both comfortable with, if we make more, then the percentage goes up to save and it also goes up to help others.
Ken: Yeah, that’s right.
Angela: So that, for us, was our big compromise financially, probably the biggest one we’ve had in our marriage.
Ken: So there it is. That’s the 5 lessons learned after 22 years of marriage. Have a bucket system so you’re clear. Have a reserve that’s not even necessarily labeled for anything for those emergencies. Buy the right insurance and get the right advice around insurance, and that will end up saving you, because these losses and occur and happen. Take the long-term perspective. Be willing to invest in yourself. Be willing to spend money on some things that might not make sense in the short term because of their potential long-term return. And then a constant ongoing set of communication that allows to just keep driving to figure out and align and get more and more confident about how you’re moving forward together. Any last words before we sign off, Angela?
Angela: No, this has been enjoyable. Thanks, not just this conversation but the last 22 years. Thanks for being married to me.
Ken: Yeah, it’s been awesome, hasn’t it? Well, thanks for joining the show, by far, my favorite guest I’ve ever had.
Angela: Thank you.
Ken: And I haven’t had many other guests, mostly just the kids, actually, where they’ve hijacked and taken over the podcast when we’re on vacation in different times. But yeah, it’s been an amazing 22 years, huge learning experience for me. I have always kinda had set my mind how I wanted things to happen and work financially, and then we got married, and you had a completely different set of ideas and perspectives about it. And it’s taken hard work, it’s taken communication. And we still wouldn’t say we’re perfect at it, and we’re not really, probably, I would say, we’re not really even where we want to be financially. But we keep working at it, and it’s one part of the overall picture of being married, raising our family, and trying to build a future together. All right. Well, that’s it. Many, many thanks to you for joining today. This is a wrap for episode 65. Happy day.