Navigating Personal Finance for Dual-Income Families and Teaching Kids About Money
Welcome back to the Common Cents Show! Today, we have an exciting double-header episode featuring Ben Hakema, the founder of Illuminate Wealth Management based in Chicago. Ben is passionate about helping everyday people succeed in today's challenging financial landscape. We discussed the increasing difficulties families face with rising prices and financial pressures, and Ben shared valuable insights on managing personal finance for dual-income families and how to talk to kids about money.
Ben Hakema's Background and Approach
Ben started Illuminate Wealth Management right before COVID-19 hit, on January 1st, 2020. Before that, he spent over a decade at another independent financial planning firm, where he was a minority partner. Illuminate Wealth Management was born from Ben's desire to help people navigate the overwhelming amount of financial information available today.
Understanding Money: Security, Opportunity, and Vulnerability
One crucial aspect of financial planning is understanding how you and your spouse view money. Ben suggests having conversations about whether you see money primarily as security, opportunity, or even a vulnerability. This understanding helps in aligning your financial goals and reducing conflicts.
Financial Planning for Dual-Income Families
For dual-income families, especially those with one spouse earning a W-2 income and the other being self-employed, Ben advises covering fixed expenses with the stable W-2 income. This approach ensures that essential costs are met, allowing the self-employed spouse's variable income to be used for discretionary spending and investments.
Dealing with Inflation and Rising Costs
Inflation and rising costs are challenges that affect everyone, but the impact can vary. Essential expenses like childcare, healthcare, and education often increase faster than general inflation. Ben emphasizes the importance of knowing where your money is going, cutting unnecessary expenses, and finding ways to save on taxes.
Teaching Kids About Money
Teaching kids about money is another crucial topic. Ben recommends starting early by involving children in budgeting and financial planning discussions. Simple activities like saving for a desired toy or explaining household expenses can help kids understand the value of money and develop good financial habits.
Conclusion
Personal finance management is complex, especially for dual-income families. By understanding each other's financial perspectives, planning effectively, and educating children about money, families can navigate these challenges more successfully. Ben Hakema's insights provide a valuable roadmap for achieving financial stability and growth in today's economic environment.
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