Once a month or so my wife and I have a money meeting. We jokingly call this meeting our monthly “Coffee Chat”. These clandestine meetings take place in the morning and under the noses of our sleeping daughters. On any given Saturday morning, we’ll make our way downstairs, cat burglar-like, to the kitchen to plot our escape from the workforce. Ironically, we treat this meeting just like one we’d have at the corporate workplace we’re trying to get away from; meeting notes, agendas, and coffee. Lots of coffee.

Living with a high savings rate can be challenging, so we find that talking about money around the house is extremely critical to our family’s FIRE success. They say that arguments about money are one of the biggest drivers of marital problems, so why not be proactive when it comes to household money? My wife and I are on the same page when it comes to frugality, for the most part, but we still find it beneficial to set up space where we can discuss money matters openly.

While we have these Coffee Chats when our kids are asleep, I find that the transparent culture about money we try to have in the home trickles down to our daughters. Especially my oldest. My hope is that our daughters can learn what they live here at home. Learn about investing and saving half their income. So later on, they can minimize the financial mistakes they’re bound to make, and “discovering” personal finance will have happened before they’re 18. By learning the basics now, they can take advantage of the most critical years of their lives when compound interest is most magical: their early twenties.

spouse

For our Coffee Chat meetings I’ll have an actual agenda printed out because it’s not a real meeting without an agenda, right? Headlining this piece of meeting gold, is our current net worth and what our net worth was when we first started pursuing FIRE.

It’s at this meeting that we discuss our current spending plans for the coming month. If something we want to buy is questionable, we ask ourselves if we really need the said item. We’re both pretty frugal and really everything we plan on buying is essential..mostly. But we still like to discuss them upfront if it’s possible. It helps us keep a focus on our end goal of financial independence and full time travel.

When we first got down to our 50% savings rate, we would go line by line down our checking account expenses. For each item that didn’t seem essential or felt excessive, we would highlight and figure out a plan on how to cut the expense down or eliminate it. By now, after a year, you would think it would be second nature to maintain a 50% savings rate, and it is, but we don’t want to get complacent nor feel deprived. So we discuss things we want to buy. And really, encourage each other to buy it if it will bring happiness to our life.

merging accounts

A huge part of what makes our plan work is our joint checking, savings, and brokerage account. We have no separate accounts other than our retirement accounts. This merging of accounts has done wonders for us since we first joined monetary forces back in 2009, the year we moved in with each other. The joint accounts have helped us form a team-like mentality. It gives us the feeling of “us against the world” and strengthens our relationship. I have a few friends that are always shocked when I tell them we share an account. I don’t think there’s a right or wrong way to do finances at home, this just works for us. We like having a single pot of gold to watch over.

Back to the coffee chats.

Lastly, after looking at our net worth, our previous month’s spending, and our forecasted spending; we’ll discuss things related to our family that aren’t completely money focused. A few months ago we both filled out our top ten bucket list together. Which I have to say was pretty fun to do during the Coffee Chat, especially since FIRE is almost required to do and see the things we have on our lists. I tacked these up in our bedroom as a reminder and motivator of all the things we want to see before we die. The lists are big and audacious, but so is our FIRE dream. We talk about upcoming vacations and weekend events to save the date.

Really, we’ve turned our monthly Coffee Chats into a husband and wife meeting with no kid distractions. It’s nice to just talk on a weekend morning over coffee, just the two of us, with a set agenda. On the weekdays we only see each other after 6 pm, and by then we’re both burnt out from work and hungry. It’s not the best time to talk about a 50% savings rate when all we want to do is eat dinner and catch up with the kids.

parents

We both grew up in families that didn’t invest in taxable accounts. I heard more about investing from movies than from my parents when I was growing up. So we’ve had to learn a lot from scratch. Money was just something not talked about in my house. Financially speaking, our parents were solely concerned with working hard, owning a house, and saving in a regular savings account; not investing in stocks. My father has a pension with the union and a 401k with a target date fund. Regular contributions over the last decades, and every ten years or so selling and upgrading to a better home, will give him a comfortable retirement in a very sought after city north of the golden gate. Very much the traditional path. His parents never talked about money with him. And so he never talked about money and investing with me.

Further up the genealogy line, my grandparents grew up in poverty in Mexico. As far back as I know, my family was always poor and lived on horse ranches in Zacatecas and the outskirt farms of Juarez. When my grandparents came over to the United States, they worked in the fields and railyards. Survival was the end goal, not wealth building. Investing in the stock market was probably as important as going to the moon to my pre-American family. Though you could make an argument that coming to the United States was a form of long term investing and wealth building for their descendants.

My wife’s parents also came over from El Salvador in the ’80s to escape the war, and they never talked about investing or finances with her either. My father-in-law has been successful at running a small business for several years. He’s shown my wife that you can take care and work for yourself if you have the will.

Our parents didn’t talk about investing with us. But they set an example through actions. What they did show us was that working hard and saving over a long period of time pays off. Which looking back and reflecting on as I write this, are pretty damn good life lessons. Investing wasn’t ingrained into me like physically working hard was. To be lazy in my family is the worst sin possible. I can distinctly remember my father telling me to never put my hands in my pockets, never walk casually, that I always would have to work twice as hard as everyone else.

Working hard set me up to take my finances to the next level. Having the internet available to both learn how to invest and utilize low and no-fee brokerage accounts really opened the door to attaining wealth for my generation.

kids

In order to right this ship, I actively discuss money with my oldest daughter. I talk about compound interest and how we maintain a 50% savings rate. For her 7th birthday, I bought her VTI (I did the same for her younger sister). We talk very generally about VTI and what it is. I try to incorporate in our discussions what companies VTI holds, like Disney or Amazon or Facebook, this seems to pique her interest most. Sometimes I’ll even open up my Stocks app on the iPhone and show her how the market has been doing if she’s in the mood to talk about it. I try not to overwhelm her with too much technical information at her age. But she knows what the stock market is if you ask her. She knows stocks are slices of companies and that she owns a bunch of companies through VTI.

I repeat so much and pop quiz her all the time about investing that it can start to feel as though I’m brainwashing her. But that’s okay. Parenting is, by its nature, brainwashing, whether we’re intentional about it or not. My kids are always watching and listening, whether I want them to or not. That’s childhood. So I don’t mind brainwashing her into becoming an investing machine.

I can honestly say that at 7 years old I had no idea what the stock market was. My 7 year old mind was filled solely with He-Man characters and watching the next episode of Thundercats…so I’m making some generational progress here.

We also talk about borrowing money from banks. How it can be good and bad. She knows I borrowed money from a bank for the house, which came as a surprise to her as she always hears us say “we own our home”. She also knows I regret borrowing money for a new car back in 2013.

Another thing we talk about with my oldest is the possibility that my wife and I will retire early and we might become nomadic when we do. She knows we are saving for retirement and her concerns are that we’ll run out of money. When she asks how much we’ll need, I tell her. She knows our FI number. For both the good and bad it entails. I heard her tell my mom our FI number a few months ago.

We also gently tell her that our plan is to travel full time. Even though it’s years away, we don’t want it to come as a surprise when the day happens. We watch Youtube videos of other families who travel full time, and on our last trip to Southeast Asia, we all only brought 1 backpack each, to show her how it’s done.

Is this the right thing to do as a parent? To be so transparent?

I have no idea.

It could all backfire on me somehow one day…or not. The funny thing about being a parent is that I wing it most of the time. There’s no detailed agenda, just a general direction. But I want her to know that saving her money is not enough. The money has to be invested. At some point, you have to stop working for the money and the money has to start working for you.

I get the feeling that it’s sinking in.

Last Christmas, when she received some money in lieu of a present from a relative, she handed the cash to me and told me to put half in the stock market for her.

“Half in the stock market?”

“Yes, in VTI.”

Any of you open with talking money with others? Did your parents talk finances or investing with you? How old were you when you “discovered” personal finance or FIRE?

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