Elle Martinez is the founder of Simplify and Enjoy, as well as Couple Money, an award-winning personal-finance site and podcast focused on helping couples build up their finances together. She’s also the author of “Jumpstart Your Marriage and Your Money.”
With 2020 behind us, many families are looking to turn the page and start making progress on their finances. However, it can be a huge struggle depending on where they were on their financial journey when the pandemic hit.
Going from treading water to making headway this year and beyond takes effort and a flexible plan. With couples, their two perspectives and incomes can be a great force for progress, or it can be a source of friction and frustration.
What is your top advice for people attempting to improve their financial well-being?
Many families want to jump to the numbers and find out how much they need to put toward their debts or what percentage of their income needs to go to savings, but the first step I recommend is defining your goals and your specific “why.”
We are bombarded every day with plenty of choices when it comes to work, kids, and more. Having an overall game plan and priorities set not only helps financially, but also makes many decisions a lot easier.
Couples don‘t have to wonder if it makes sense to order dinner delivered (again) because you know you are really looking forward to bigger goals, like knocking out your high-interest debt, buying a house, or taking a much-needed vacation.
It’s not about deprivation, but rather priorities and values.
Being intentional with how you spend, save, and enjoy your money allows you to make sure it’s moving toward the people and goals that matter most to you.
One of the best ways to stay on top of that is by tracking your finances. We have incredible options out there like apps, automated spreadsheets, and, of course, the tried-and-true pen and paper. Whatever works for you, go for it.
Finally, since we’re all busy, go ahead and automate your money so it is moving toward those goals that the two of you care about. This has been such a weight off our shoulders! By scheduling those transfers, payments, and investments, we’ve been consistently hitting our goals.
Do you have any best practices for improving one’s financial literacy?
The wonderful thing about the personal finance space is that there are so many wonderful resources available in different media formats.
Besides websites and books, which are fantastic, you also have podcasts as well as long- and short-form video. I would recommend finding a format that fits you and have that be your entry point.
Before the pandemic, I had a long queue of podcasts lined to listen to while I drove. Now I’ve also added video to my routine with YouTube.
There are creators who not only break down the headlines in short digestible chunks, but you have a wide variety of families who are open to sharing their numbers and struggles.
How have you seen culture impact a families’ financial decisions?
Family and finances is an already emotional and rational balancing act. When you have couples who come from different cultural backgrounds, there’s an added layer of communication needed.
Besides figuring out what values you want to pass on to your kids, another important topic to discuss is how to care for your aging parents. For some, there is a cultural expectation that as they get older, financial support would be expected.
With the pandemic, this issue may have come up quickly. With nursing homes being on the news, it’s understandable to wonder what other options would be available or financially reasonable.
Discussing these scenarios (preferably while parents are relatively young and healthy) before an emergency comes up removes some of that emotional pressure. I think it is possible to find a solution that respects both spouses, but it first takes understanding where each of you is coming from and making time to brainstorm different ideas.
Especially with the onset of the pandemic, many children are home, limiting parents’ time that used to be spent focusing on earning additional income. How do you suggest families continue to gain financial ground?
It is amazing how drastically things changed with the kids home full-time. My husband and I consider ourselves fortunate because we had some experience working from home, but it is a whole different ball game with kids doing their school remotely.
While not impossible, it will take some creativity to build some extra income. Here are some ideas I’ve seen friends and those in my community do to supplement their income:
1. Selling on the side
When the pandemic hit, one of my friends who worked for a financial company was laid off along with others in her department. She decided to sell crafts on Etsy to keep some income coming in. Very soon, there was a great demand for masks, so she pivoted and was able to bump up her income.
While she eventually found a job with benefits, she still has continued selling her art on the site. That’s allowed them to make some progress on their financial goals and she has an income stream based on her creative talents.
Another way families can earn some extra money with selling is through flipping. If either one has an eye for a bargain, flipping hidden gems from yard sales and local ads, and listing them to a broader audience online can provide some extra cash while minimizing impact to one’s schedule.
2. Share economy
There is still demand for deliveries as this pandemic continues, so I’ve heard those in my community taking advantage of the flexible scheduling, and doing grocery and meal delivery.
Some parents have found that staggering their schedules (maybe they do their deliveries before or after school) allows them to boost their income a bit even if they are working limited hours.
While not strictly earning extra money, another way the share economy can ease the financial burden is by joining in communities like Freecycle and Buy Nothing. You can find gently used items for free.
What do you recommend for people to do today to protect their own and their families’ long-term financial security?
I believe it is absolutely key for families to have an emergency fund. That should be the first priority.
As we saw last year, things can change quickly and having that buffer is key. Try shooting for one month of essential expenses as the first milestone.
You then beef that up with regular contributions every paycheck or month. Use any windfalls like tax refunds, stimulus checks, and bonuses to pad your savings. The goals should be at least six months of essential expenses.
Having that financial cushion can keep you from using high-interest debts like credit cards to stay afloat. High interest debts are like quicksand; even if you pay monthly minimums, you’re just being dragged deeper and deeper into debt.
Again, automating your money is important. Most families I know have a full plate, so alleviate some of that stress and get regular transfers set up.
The good news is once you have that habit in place, you can take that habit of saving and direct it toward other goals that can help your family long-term, like saving up for a house or investing for retirement.
Another thing to keep in mind is to take advantage of what benefits you may already qualify for. If you’re working and your company offers benefits like disability insurance, that can be an added layer of protection.
Approaching your finances step by step is a much more effective (and less overwhelming way) for families to hit their goals.