We are a family of 3: mom, dad and a son. We are a fairly young family too; I am in my mid-30s, my wife is in her early-30s and our son will be 8 in July. My wife and I were both career focused with our outside jobs. We were living in a rental house in the city when we got married. Within 2 years of our marriage, our bundle of joy joined us 🙂
Our son is one of the main driving forces for our financial success. After marriage, my wife and I started thinking about ways to establish a home-based company so that in time, as she got pregnant she could work from home. That let to establishing our IT/Web consulting company in August 2003. When our son was about 1-year-old in 2006, we wanted to provide him with a backyard and a roomier place and a decent elementary school experience, so we decided to buy a house in the suburbs of New York, namely Long Island. We decided to travel all over the U.S and abroad. We decided to visit my family in Turkey at least once a year as well, so he could get the experience of traveling but also the warmth of his extended family as well. On our way back to New York, he started crying in the airplane while it was about to takeoff. We asked him why he was crying for and his response was that he wanted to stay in Istanbul a little more so he could play with his grandpa, cousins, etc.
We always paid extra to our mortgage since the beginning but after this drama, my wife & I decided that we needed to finish off the house payments and become location-free. Therefore, we accelerated our payments and we paid off the house in April 2012. The house’s total costs, including purchase price, closing costs, property taxes, homeowners insurance, etc., from purchase to pay-off was about $630,000. We had paid about $365,000 within 20 months after our latest trip to Istanbul. As soon as the house was paid off, I resigned so we now have become location-free company. As I said earlier, our son is our driving force for our financial success! Below are some financial rules that we practice.
Some Financial Rules that Our Family Practices:
- First and foremost, have your family in order. A stable family where husband and wife have similar or same set of goals is the bedrock of financial and emotional stability.
- It’s always The Family Finances, never his or her finances.
- Be happy with what you have, not with what you could or should have!
- Do not compete with Joneses! One of the best ways of doing this is to live in a neighborhood that does not force you to compete with others in the first place. For example, drive a modest car and live in a place where everyone drives modest cars. Don’t get me wrong competition can be a good thing, but in the case of “Keeping up with the Joneses” it can lead many to an unhappy bankrupt life.
- Be mindful of your financials. Always plan ahead. Never ever carry any credit card debt. That does not mean don’t use credit cards. Do use cash reward credit cards all the time so you can track your expenses AND earn money, but don’t go above what you know you can’t afford.
- Try to make as much money as you can. One of the best ways of doing this is to work for you; own a business. Keep in mind that owning a business could be as simple as having a website or selling something that is in demand and you know how to make or provide!
- Save as much as you can. Choice of saving may vary, but do save!
- Always live below your means, regardless of your income.
- Know, plan, and track your cash flow for short-term and mid-to-long term
- OVER estimate your future/potential expenses and UNDER estimate your future/potential income.
- Live in a good public school district so you can avoid the expense of a private school and take advantage of the free amenities, such as library, community center, tennis court, etc.
Bonus: Some Financial Rules that Our BUSINESS Practices:
- Be great at what you do
- Accept clients through referrals almost exclusively
- Always deliver a superb job at the minimum time
- Charge what its worth
- Invoices are always due upon receipt
What financial rules do you practice? Would you share them with us?