Money and Your Childfree Life

DINK (acronym) "dual income, no kids". This is a term that describes a childfree, or childless, couple where both partners receive an income. Alternatively you can use the term SINK (single income no kids) if only one of you are working, or if you are single. As a DINK couple we have extra considerations to make when approaching our financial life. A family with two incomes and no children has a higher likelihood of flexibility in their budget and more disposable income. If we aren't careful, we can easily get into a habit of overspending and not preparing properly for the future. The first step to a healthy financial life is a budget. Even if you have excess money and a comfortable buffer it's still important to know where every dollar is going. Dave Ramsey, American radio show host, author and businessman, says A budget is telling your money where to go instead of wondering where it went.” You might have $200 a month to burn on whatever you want, but it's important to be able to tell that money it's allowed to burn. An ideal budget looks something like this:

Certain parts of your budget will remain static and it's important they do. Savings and giving should come right off the top, before anything else. Your housing costs should never cost you more than 25% of your budget. Other things like food and utilities will fluctuate as seasons of life change, but the important thing to do is keep track of those fluctuations, always knowing where your dollars are going.

Your second step is prepping for the future. When people ask "Who will take care of you when you're old?" you should be able to confidently answer "I will take care of myself." We can't rely on government funding to care for us in retirement. With the cost of living increasing and extra care needed in old age, we need to prepare for our future. Starting saving earlier is the easiest way to insure you have enough resources to retire. See Chart Below.

Ben, who started saving earlier, and eventually stopped, saves over $2,000,000 by the time he is 65 due to compound interest. Maybe your budget won't allow $160 a month in savings, but even something as small as $25/month over a few years adds up. Start now with what your budget allows and increase as you can. The point is to start.

Third is planning for a rainy day. Insurance is a big consideration and a very important part of anyones financial health. Everyone should have life insurance, regardless of income or situation. The last thing you want to do is leave a financial burden for those you leave behind. A life insurance policy should be large enough to accommodate for the financial impact of your passing. Consider things like lost income, debts, funeral costs etc. Other insurance options that are important to consider, but may not be appropriate for everyones financial plan, are disability insurance, long term care insurance and critical illness insurance. Ultimately the most important thing to remember is preparation, it is up to us to insure we are taken care of financially later in life. We need to be committed to the plan, dedicated to the goal and patience to see the results. "A huge mistake that many of us make is to work hard our entire life for money and not require our money to work for us in return" - Daniel Willey


** Although I stand by this advice, always consult a professional financial advisor for advice and guidance with your personal financial decisions.