Governing Financial Principles

I want to share with you the concept of Governing Financial Principles (GFPs). Once implemented, these principles are your financial Commandments or Constitution, guiding all decisions you make about how to handle your money.

GFPs should be developed based on what you value most. And because the principles reflect your values, they should be always or never propositions; not maybe, or I'll do it unless it gets too difficult.

If you do this right, you will end up with unbreakable laws for your money, which should lead you toward invaluable peace of mind, unity with your spouse, and, eventually, tangible prosperity.

Mrs. Budke and I have three key Governing Financial Principles:

1. We are both fully and equally responsible for all the money that comes into (and leaves) our household.

2. We never use debt.

3. We always have sufficient savings in the bank.

   
   

In future posts, I will expand on each of these in full detail, but for now I'll give you a quick glimpse at how these principles have improved both our money and our marriage.

Since we are fully and equally responsible, we have to decide together how our money will be spent. That forces communication about where we want to go and promotes consideration for each other's financial dreams and fears. When we agree on our money, we agree on our life together.

Next, since we never use debt, we have already eliminated the presence of stress experienced by many couples who over-borrow and get buried by the weight of loan repayments. Further, this principle stops most potential money fights before they even begin; if one of us wants something, and we don't have the cash to buy it at that moment, there is not even anything to argue about. We already both know the answer is not right now because long ago we agreed that we will never borrow money. Instead, we prioritize the item in question, and we develop a timeline to save and pay for it outright.

Having sufficient savings in the bank ensures that Mrs. Budke sleeps very well at night, and also, quite importantly, it ensures there is never any dire situation wherein we might feel desperate enough to violate Principle #2. If an emergency were to arise, we always have enough to cover it.

I strongly encourage you to start thinking about your own Governing Financial Principles, so that you can be intentional about how you operate your household. You can do it.

-FB