#15 - Teach Your Kids Money, Business Planning and Weddings! (Q&A)

Our 3rd Q&A, thanks for sending in awesome questions! Keep em coming!

Q1: Why don't we teach kids personal finance in school - the answer was really more about teaching your kids personal finance yourself! They key here is giving your kids some autonomy over their money. Plus - take some ownership yourself, you need to learn too so you can pass on good lessons!

Q2: How to manage cash flows when both members of the household are small business owners - bonus! How to know how much house you can afford:

You want to be spending roughly 20% of your income or less on a home:

  • Take your income and multiply it by 0.2

    • this is how much you can afford per year in mortgage payments + taxes + insurance

    • divide this number by 12 to get the monthly payment you can afford

  • Use a mortgage calculator like this one to figure out how much of a mortgage balance you can afford

    • Otherwise you need a financial calculator and need to solve for present value to get the mortgage balance (don’t worry about this step, just estimate in the calculator)

  • Once you know the mortgage balance, divide it by 0.8 to get the amount of home you can afford

  • Subtract the home price from the mortgage balance and that’s your down payment! Now you have a goal to save for

Q3: How to know when it's the right time to save for retirement as a business owner? It depends silly! How capital intensive is your business?

Q4: What is an appropriate amount to spend on a wedding? Not a lot! hahaha. Seriously though, examine your thoughts on why you want to spend so much on your wedding - I bet they’re not what you think they are.