Q&A: Managing our finances responsibly

Q: My wife just got a new job with a substantially better salary, and I received a significant promotion. We’re empty-nesters and want to handle our increased income responsibly (we haven’t always been the best financial decision makers in the past). What should we keep in mind?

A: This isn’t really a question about the best way to use your money. That’s a highly subjective issue that we can’t possibly resolve for you. What you really want is a broader set of principles. Financial expert Ron Blue suggests the following criteria-based model for making fiscal decisions:

  • Define your decision. What’s the question? Many times your decision statement will include such words as “choose,” “select,” and “best.”
  • Clarify your objectives. What are you trying to achieve? What are the decision criteria?
  • Prioritize your objectives. What are the non-negotiables? What are the trade-offs?
  • Identify your alternatives.
  • Evaluate your alternatives. What are the facts?
  • Make a preliminary decision.
  • Assess the risk. What could go wrong here?
  • Make the final decision.
  • Test the decision.

This multi-step matrix has a number of benefits. Perhaps the most important is its capacity for maximising objectivity, minimizing bias, and thus defusing emotion-based disagreements. If you discuss and apply it carefully, you separate the relevant data from the trivial, provide direction for your thinking, and set the stage for consensus as a household.

© 2018 Focus on the Family.  All rights reserved.  Used by permission.

Share

Share on facebook
Share on whatsapp
Share on email

MORE

MARRIAGE

Real Life Solutions

The first step to connecting well sexually is to do so verbally. Discuss 7 essential questions that will help you and your spouse satisfy your differing needs for intimacy in your marriage.

Read More >

PARENTING

FAMILY Q&A