Smart Couples Finish Rich Chapters 6 & 7: Boring Money and Awesome Money

Sundays are State of the Union days in our house, when sweetie and I sit down to talk about how we're doing relationship-wise. Sometimes they're quick check-ins, sometimes we get into a little more depth, depending on what we've got going on. In this year leading up to our wedding, we've decided to make finances a central part of our State of the Union talks. Over the next couple of months, sweetie and I will be reading Smart Couples Finish Rich by David Bach and discussing the latest chapter at SOTU.

OK, so David Bach does not call them "boring money" and "awesome money," those are just the helpful captions I have appended to Chapters 6 and 7. Chapter 6 covers boring money: emergency funds, life insurance, health insurance, disability insurance, and wills (your security basket, in DB's terms). Chapter 7 (your dream basket) covers awesome money: anything your little heart could desire.

I didn't blog last week about boring money because frankly, it's boring. But here's the quick and dirty summary: by the time we get married we will have (unless things go very awry) over three months of expenses in an emergency fund. I'd saved that before the end of 2007 and then had (surprise!) an emergency. And of course, our shared expenses will be higher than mine are alone, with two cars to insure, two sets of student loans, his credit card payments... Both of us have life insurance through work, and some cash value policies that were bought for us by family members when we were kids--not a choice I would have made myself, but also not my money. We both have health insurance through work, and we've got plenty of time to figure out whether we'll consolidate that after the wedding. I have long-term disability insurance (though I could use more), and Shiner doesn't--not something I'm concerned about, though, since I'm the primary wage earner. We need to figure out what we're doing for a will, but I'm willing to wait on that for a few months or a year. Put that on the to do list along with the health care directive.

Now for the awesome money! Awesome money is for all the fun things that aren't strictly necessary but that you want just the same. First on the list is the wedding, probably because we're in the thick of it and it's easy to see the light at the end of that tunnel. Man, it will be nice to acheive a goal. Some of the others are standard: travel, house remodeling projects, certain specific toys like Shiner's dream motorcycle and my dream Vespa, or his ever-expanding homebrew setup that produces delicious things I like to drink.

The one I am most excited about, though, is the cabin. For years, my earth nerd long-term dream has been to buy a piece of land in the woods and build my own small straw bale house to be a vacation home and family retreat, and possibly in time a primary home. Luckily, Shiner is on board with this goal, and bonus points because he's handy, too. First steps will be to buy the land and volunteer one one or two stale bale house-raisings, and then to try it for ourselves. It's a very long-term goal--the biggest, most expensive, and most daunting goal on the list--but one I'm so excited about.

One thing this chapter doesn't do a very good job of addressing is how to balance the competing interests inherent in saving simultaneously for multiple goals. I have been keeping two awesome money goals in the air at the same time: wedding savings and travel savings. I'm also saving for emergency money and retirement, and paying down debt as well, but add in many more goals and all of a sudden it becomes too diffuse. There's so much less money to go around, and progress on any one of them seems so slow. Personally, I do much better focusing hard on a couple of goals in sequence rather than consistently putting smaller amounts of money in lots of little pots. But I have a feeling that's not going to get me my cabin.