DINKS (Dual Income, No Kids)

Skin-a-ma-rinky-dinky-DINK 
 by Cori Bryan 

What a great situation to be in! First of all, I want to say congratulations on being a successful couple in a difficult economy. It is important to be very thankful for the situation you and your spouse have created for yourselves. You are independently successful financially and have now joined together in holy matrimony, "for better or for worse....for richer or for poorer." As of now you are in the "richer" part of holy martrimony and the goal is to remain that way till "death do you part."

How to Stay "Richer" and Never "Poorer":

You are now dual income with no kids, but there may soon be a day where that is not the case. There are several situations that may change your status. Kids may come, one spouse may choose not to work or heaven forbid one or both of you may be laid off. The way to prepare for this time is to live in the DINK stages of your life as if you are not a dual income family. From the first day of marriage, always LIVE WITHIN YOUR MEANS. When you decide on large purchases, try to think about what you NEED versus what you WANT and come to a middle ground based on your income. Try to make large purchases you will be able to sustain on only one income.

Living on One Income:

As everyone's goals are different, it is a necessary to sit down with your spouse and talk about what you want in the future for YOUR family. Hopefully you talked about this before you wed, but it is never too late. My husband and I are both pilots in the Air Force and we have been married for 3 and 1/2 years. We decided very early on that when we have kids we want the OPTION for myself to be a stay at home mom. Although we may both continue to work even after children arrive, we have positioned ourselves to live on only one income. This has afforded us the luxury of having options when the time comes. We purchased our house as if we were a single income family and we have made all of our large purchses based on what we could afford at the time. If we couldn't pay cash for something, that meant we could not afford it, even cars. We have also paid off all loans and our only debt is our home, which we are working hard to pay off. There is no risk associated with living a debt free life.


Times to "cheat":

The goal is to figure out how much income the spouse planning to continue to work makes and live on their income alone. Month to month you should be able to save one spouses entire income. As there are times in every diet where you should be allowed "cheat days," the same goes with saving as DINKs. On average, live on one income, but when there is something you really want, allow yourselve to indulge on occasion. As long as you can pay cash for that item, there is no reason not to reward yourselves for your hard work. Remember why you married your spouse in the first place and support each others passions. My husband and I both find pleasure in the great outdoors and have made several purchases to support this lifestyle with some very nice outdoor gear. We love boating, competing in tritahlons, working out, rock climbing and photography and with these hobbies come expensive equipment. We feel it is important to stay healthy and believe these have been worthwhile purchases. An emphasize item however is;` we have our days in which we "cheat," but we maintain a debt free standard of living with the exception of our mortgage.

In Conclusion:

DINKs have a tough task. It is easy to live large, but you would be letting down your fellow DINKs if you do not live responsibly and set yourselves up for future success. Please do not make the rest of us look bad...we have worked hard to get here. If you remember nothing else...remember these three tips:

1. TRY TO LIVE ON ONE INCOME

2. ALWAYS, ALWAYS, ALWAYS...LIVE WITHIN YOUR MEANS

3. Enjoy it while you can :)

Kids 'n Cookies - A Lesson in Budgeting

“Keep your lives free from the love of money and be content (satisfied)
with what you have.” Hebrews 13:5

I recently completed a video project (see below) to explain budgeting through cookies and jars that even a 5 year old could understand. We had a family of six as my audience with children from ages 5-12. We used cookies instead of money to put in the jars as each one represented a category we all need to budget for.  As a coach of 40 years I would like to use the term, “Game Plan” in place of budget and told the children that I was going to teach them to be, “The Boss of their money.” Most kids like to be the BOSS. We had ten empty jars sitting in front of them and we had one extra jar that was full of cookies sitting in the middle. I proceeded to ask the children what the jar said and they all shouted out, “Credit.” I explained that their parents had cut up all of their credit cards and were now only using cash or a debit card. Credit meant they really did not have the money and the Joneses next door had an entire jar/wallet of credit cards. I informed them that even though the Jonees had all of the latest “stuff”, ate at expensive restaurants, and went on exotic vacations that they were really “BROKE”. 

I then took away the jar of cookies (credit) and replaced it with a plate of ten “Income Cookies” and told them they were going to place each of the cookies in the various jars. I let them know they would get ten cookies each month and they could not have their Mom make more during the month (emphasized credit again and living within their means.)

Where do your "Cookies" go?

I started with having one of the children pull out the “Giving Others” jar and asked them all that if they had a friend who did not have any cookies would they give them one of theirs. They all said, Yes – so I had them put one cookie in the jar. On the chalk board I showed the children that one cookie represented $400.00 to the average family in America as of 2011. This also represented 10% of their total $4,000.00 income. Next I had them find the “Giving Me” jar and bring it out in front of them. This jar I explained was a savings jar for future expenses like that new bike or car eventually. I had them grab another cookie and place it in the jar and let them know that represented $400.00 or 10% of their total income and they would still have $3200.00 or 80% of their income to live on. The next jar represented the “Rent or Mortgage” and I had them place 2 ½ cookies in that jar. This represented 25% of their income or $1,000.00. The children then pulled out the “Utilities” jar to represent gas, electric, water, cable, phone, and internet. They put one cookie in that jar – again $400.00 or 10% of their income. Next was “Transportation” and the children put in another cookie. Food should typically be the 2^nd biggest expense in your household behind the rent or mortgage. We placed 1 ½ cookies in that jar to represent $600.00. We also mentioned their Mom was a very good cook and planned all of the meals for the month – just going to McDonalds with a family of six can cost over $40.00. We had a jar for school and placed ½ cookie in that jar then the other ½ in the Insurance jar. Even the 5 year old understood what insurance was as he had recently broke his arm and his parent’s needed to pay for some of the hospital bills. The last two jars were Miscellaneous or Emergency Fund for unexpected expenses and lastly the “Fun Stuff” jar which we put ½ cookie each or $200.00 and 5% of their income. The kids were very quick to tell me what they would do with the “Fun stuff” cookies. We emphasized that their parent’s had a “Game Plan” to eat/spend every cookie/penny each month and become the boss of their money.   At the end of this video I gave Five steps in getting started with your budget or “Game Plan.”

1. Start recording every penny you spend this next week and continue for one month.

2. Start using cash initially for groceries and entertainment to include eating out. (Envelope method – When the money is gone that is it until the next pay day.)

3. Write down all income that comes in each month then all expenses that go out each month.

4. Assign every cookie/dollar to a jar/category.

5. Lastly, “STOP IT” – that is using credit cards and borrowing money.

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Pool Table vs "Rule of 72"

                                                  Investopedia Financial Dictionary:

A rule stating that in order to find the number of years required to double your money at a given interest rate, you divide the compound return into 72.  The result is the approximate number of years that it will take for your investment to double.

Investopedia Says:

For example, if you want to know how long it will take to double your money at 12% interest, divide 12 into 72 and you get six years.

Many of us have big ticket items (> $4,000)  we have purchased and then just let  collect dust.  I’ll never forget that pool table I just could not live without another year.  We went out and purchased it on “90 days – same as cash” which by the way is not a true statement.  We knew we could put aside $1,500 a month but instead of saving for three months and paying cash we WANTED it now.  The problem was that our refrigerator went out after 5 years and we had to wait an extra month, then we needed brakes and needed to wait another month.  I am sure you are getting the point. 

When you buy on credit you are taking a huge RISK and it is what leads to financial disaster in many homes across America. Now I am not against buying big ticket items but do NOT buy them on credit.  Save and pay cash – what a novel idea.  Below are ten items that would be considered wants and not needs.  You could probably list many more.  You WANT a brand new Lexus but you NEED transportation.     

    1.  New Car 
    2.  Motorcycle

    3.  Home Furnishings

    4.  Season tickets to a sporting event  (I mean your own box)

    5.  Boat

    6.  Theater room

    7.  Pool table

    8.  Mustang you will rebuild

    9.  Vacation

    10.  Hot Tub (Come on – you gotta have the hot tub – especially when it snows!)

Now let’s take a $4,000 big ticket item and instead put it in a Roth IRA earning 12% interest.  Using the Rule of 72 if we never touched the $4,000 and put it in at age 25 by the retirement age of 67 you would have over $500,000 in the account you could start withdrawing tax free.  Wow!!!!!

Here are 5 simple steps in coming up with a “GAME PLAN” to purchase that big ticket item that you MUST have now!

         1.  Get on a Budget

       2.  Have an Emergency Fund of at least $1,000

       3.  Have all consumer debt paid off – especially credit cards

       4.  Agree with your spouse (if married) on the purchase

       5.  PAY CASH (You will probably appreciate it much more)

Are you really going to work on that mustang??