If you're married, you do too whether you paid for one or not.

A prenup outlines what you and your husband or wife to be have decided the rules should be about your property and what obligations you have to one another if you get divorced.

If you pay an attorney to draft one for you, what you agree upon before you get married becomes the starting place for the separation of assets (among other things) if you get divorced.

If you don’t or didn’t pay an attorney to draft a custom prenup for you, the starting place for deciding separation of assets is your state’s laws around the division of marital property.

If you can’t agree on something with a mediator that seems “fair” and within the guidelines of your state’s laws, after lots of money and, likely, grief, a judge will decide based on their interpretation of the laws and facts of your marriage.

The way things work out without a prenup might work out great for you. Or they might not. But in my experience prenups actually tend to protect the lower earning, lower asset spouse (as opposed to letting the richer spouse stay rich and leave the poorer one with nothing like people like to imply).

In Massachusetts, for example, where the law is for equitable (not equal) division of assets, sometimes the higher earning spouse who comes into the marriage with more assets actually walks away with much more than half because they brought more than half to the table financially and that’s what’s “fair”.

We all know there are situations where couples choose to have one spouse stay home or put their career on hold intentionally for the good of the family. Their contributions are non-financial but very valuable.

I digress.

My point is, whether you pay for one or not, there is a very loose and open-to-interpretation-by-whichever-judge-you-get agreement in place.

Do I think everyone should get a prenup? No.
Do I have one? No.
Did Bobby and I consult with an attorney and thoroughly consider having one drafted before we got married? Yes.

Not because either one of us went into this marriage thinking a future divorce is on the table, but because we both believe that not making a decision is very much making a decision

Prenups and budgets have a lot in common.

There are a lot of misconceptions about them
People generally don’t like the idea of them
They are taboo to talk about in mixed company

And whether you think you do or not, you have one.

Everyone has a budget.

Whether you sit down to create one that supports your ideal life and your spending, saving, and investment goals or not, you are spending (and hopefully saving and investing) money using whatever habits and beliefs you hold and whatever income (and often credit) is available to you.

At the end of the year you’ll have spent, saved, and invested and that will have been your budget.

But there’s a BIG difference between deciding how much you want to save, spend, and invest this year BEFORE you do those things. And between randomly spending, saving, and investing throughout the year and hoping things shake out the way you would have wanted them to if you had planned.

Your money doesn’t accidentally support your ideal lifestyle and goals- that takes intention.

I typically have a great relationship with my personal budget. In fact, the mastery of my personal budget is the thing that allows me to optimize my business finances, make better business decisions, and consistently build wealth every single month regardless of revenue.

I know exactly how much money our life costs with no frills and no additional savings. And I know what our life normally costs when we’re spending on extras, saving for big spending, and investing more aggressively than just funding “work optional”. I also know what’s at stake if we don’t save or invest at the higher level.

So does Bobby.

Knowing those numbers allows us to be flexible, not stress about money, and understand the opportunity cost and impact of changes.

The traditional version of budgeting that involved a spreadsheet with 200 line items and a monthly amount allowed for each spending category does not work for me. It’s too time intensive and rigid.

I usually review our personal spending numbers for the last quarter, which takes an hour at most, then I get a glass of wine, sit down with Bobby to go over our average spend in our most important categories, and we discuss and make tweaks.

If we’re in a period of high spend or high change, we might do this more frequently. But until last April, it was a pretty consistent thing quarter after quarter, year after year. And it’s served us well.

Our lives, like everyone else’s, have seasons. Sometimes we consciously choose to save more. Sometimes we consciously choose to invest more, and sometimes we consciously choose to spend more. We don’t have standard rules of thumb that we follow to the letter.  It’s about balance.

But 2022? We looked our numbers once.

We had a cross-country move, a huge trip for Bobby’s 40th, other smaller trips, a misstep with a full time nanny, flew in family multiple times, adjusted to life with a baby and life in a new state, felt like we were sick every other month… to be blunt it was chaos and we spent a TON of F*&%ing money.

Last year I probably should have reviewed our budget every month instead of every quarter, but I totally abandoned it.

It wasn’t intentional. And I kept thinking it was fine because of all the prior work we’d done.

But, things weren’t fine and it took being completely off the rails to realize I was way overdue for a review. If you wait until it’s obvious that something’s broken with your budget- you’re way too late.

And that’s when the dread sets in.

You might think I’m immune to these feelings because I deal with money and planning all the time. But I’m not- I’m human. And even though I know the past is the past and the numbers are just numbers, I couldn’t bring myself to do mine.

 It just felt like such a heavy lift.

When I finally looked at 2022 spending and did a full review with Bobby in January 2023 after 9 months of neglect, it felt really good.

Not because it was better than I expected- the reality was WAY worse than what I would have guessed. And it was blatantly obvious that if I would have just prioritized looking at the stupid numbers when I realized things weren’t on track, we would have and could have made different decisions.

Despite all that, it still felt really good to get back on track. We have the tools to adjust and make different decisions going forward.

And the experience made us more committed to getting back to our quarterly (sometimes monthly) reviews.

We dug into our past spending and made some decisions about what we want to happen this year and even next year. We came up with tangible changes we want to make so that we can 100% spend better and differently without needing to track every penny and while still living our best lives and without needing to use willpower or big sacrifices.

I’m grateful we have the tools we need to make this easy.  And I’ll be sharing more details about how we approach budgeting and financial decision making as a couple in the coming months.

But in the meantime, here are my questions for you:

1. If you were to sit down and look at how much you spent, saved, and invested last year, how would you feel about the decisions you made and why?
 

2. If you know you’d feel like there was major room for improvement, are you committed to take the time to actually look at what happened in 2022 and make conscious changes for 2023?
 

If not, what’s getting in your way?

Feel free to hit reply to share on any or all of these Qs and to let me know what you biggest hang ups are with managing your cashflow/personal “budgeting”. I’d love to know and I always reply.

Nicky