Episode 1

March 09, 2022


001 - Family Finances - How to win, together

Hosted by

Vincent Heys
001 - Family Finances - How to win, together
Financial Wellness with Vincent Heys
001 - Family Finances - How to win, together

Mar 09 2022 | 00:19:23


Show Notes

No one looks after your money better than you, because no one cares about your financial security quite like you do. And even though you’re the best person to take control of your finances, we all need a few nudges in the right direction when it comes to handling our money in the wisest way possible. Vincent and Caren Heys have spent 23 years of marriage working on their financial management as a family and have some great insights to share with you.

So wheather you're married, have kids or you're single, this episode will give you real-world tools to implement in your financial planning and management. At Wealthstack, we know that it's hard to know where to start when it comes to your family's finances, so this episode unpacks 5 practical principles from Vincent and Caren Heys that will set you up for success.

Proudly brought to you by wealthstack.ca - See how you stack up against your financial goals. Create your financial dashboard in less than 7 minutes.

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Episode Transcript

Vincent Heys: [00:00:00] From wealthstack.ca. Welcome to the financial wellness podcast series, where we discuss all kinds of financial principles, concepts, and products. Our aim is to make money matters, simple again. Vincent Heys: Welcome to our podcast show where we make money matters, simple again. I'm Vincent Heys and this show is sponsored by wall wealthstack.ca. The focus of this series of podcasts is really to help people understand financial services and financial planning better. Now, there are many places where we can start talking about financial planning, but really when we go through this. Vincent Heys: We want to make sure that we speak to the non financial person of a family so that that person can understand financial services a lot better. And you might ask why another podcast series on [00:01:00] finances? Well, the simple reason is I've been speaking to hundreds of clients and also to hundreds of financial advisors. Vincent Heys: And they all say the one comment thing, people just don't know. And that is that is a fact. If you know, we've seen that if clients understand better, if they understand their finances better, they know better questions to ask. And also no one really will look after your finances better than yourself. In the studio today, I have my lovely wife, Karen, and we want to unpack a few things that we've learned the last few years about finances. Vincent Heys: And we thought it might be really useful to share that with our friends online. We know that our relationship was money really impacts the way that we deal with people and especially within the marriage context, but also when people are single, how they relate to other people depends on their view of [00:02:00] money. Vincent Heys: So at the end of the podcast, we will share just a couple of tips that practical tips that we think that people can implement that, that will just help them in this. But let me bring Caren into the discussion. You know, we've been married for 23 years. Everyone tells you that when you marry someone, you do not only marry the person, but also the family. Vincent Heys: And it's great. You have your Caren, Caren Heys: oh, thank you. Thanks for having me on the show today. So I think first of all, I'd like to say that yes, we come from different backgrounds, but we also very different in personality . So Vincent is an actuary with these analytical mind that would say, and I am a musician by profession. Caren Heys: So it's quite a different way of just doing everyday life, I think. And then of course our families differ. Yeah, quite a bit. I would say my dad worked for a big corporation and he ended up with a defined benefit pension plan. And mom had a small [00:03:00] business, whereas Vincent's parents his mom had a factory, a bed land, and factory, and dad was a farmer with multiple farms. Caren Heys: So there was quite a big difference in how. How they handle their finances. I think my parents were definitely more used to the monthly salary salary. Whereas Vincent's parents the more of an entrepreneurial background. Vincent Heys: Yeah. So we've you know, we've looked at those different ways that they handled money. Vincent Heys: And obviously like in any couple, there's always a bit of stress and fighting, you know, we've, we've intentionally thought. Yes, we want to take the, the, the great things that they've taught us. But we also wanted to add on top of that, some stuff that we've learned over the years, and just kind of implement that in within us as a family. Vincent Heys: And those are just five principles that we just want to share with you today. And the first one really is the principle of everything belongs to everyone. Caren, your view on that? Caren Heys: Yeah. So I [00:04:00] think as I am a musician, I obviously do not earn the same kind of money that Vincent does. And I think that that can be a bit of a an issue in, in different households. Caren Heys: You know, if, if you have a split income between two and one is responsible for this and the other is responsible for that, it becomes, I think it can become quite an an issue of conflict. Whereas we just decided to put everything together in one big pool. And like Vincent said everything belongs to everyone. Caren Heys: And then we kind of work from that pool instead of having. Basically two separate financial, Vincent Heys: Goals or plans or whatever lives. Yeah. Yeah. So that, you know, so practically we, we had, we have one bank account where money comes in and then and then multiple other savings account or bank accounts that we allocate money to you know, for Caren, Vincent Heys: to go and spend the money that she's responsible for. Like, let's say groceries, for example, or, or medical [00:05:00] expenses. And I have an account where I spent money again for other things, but really the money comes in as, and says for everyone. It's not it's not my money or her money. It, so it just reduces a conflict pretty quickly. Caren Heys: Yeah. And there isn't a control thing. I think sometimes it, it becomes a control situation where if one person earns you know, a lot more than the other becomes a controlling thing. And you know, I've often I have had friends. The spouse would be all on top of them the whole time for everything that they spend. Caren Heys: And I think that's really important to have financial freedom. And I mean, for me, it is, I have a certain amount that I, that that's allocated each month for you know, the different things that I need to pay and I'm responsible for that. And so was Vincent. And at the end of the day, we both accountable to one another. Caren Heys: So that's really you know, it really has helped a lot with, with, I would say with, with friction or, or conflict in financial relationship. Vincent Heys: Okay. The second principle that we have is [00:06:00] a seed money and bread money. This is an interesting one. It's a friend of ours. Alan Thompson is a successful business owner in South Africa and, and he always taught us about this principle of, of seed and bread money. Vincent Heys: Now your bread money is all the stuff that you consume or spend or enjoy like holidays, for example, and you seed money is the seeds that you plant for a future harvest. So obviously you can think about a farmer, you know, you, you plant seeds for that harvest in the future, but that seed could also be money that you put away into an investment portfolio. Vincent Heys: Or start your own business or anything that you not going to consume immediately. So that's you know, it is a great principle to have, so Caren, I we started you know, seed investments with Ian and Tracy Delana 15 years ago. And so after 15 years of seeds, those are now our harvest. [00:07:00] And so the same thing that we did with other companies. Vincent Heys: And it's just to really take part of the money and put that away for, for future harvest, as opposed to eating all the bread now. Caren Heys: Yeah, I think I'm just to, just to come in on that, Vincent, I was just thinking of something very simple. Like in Canada, you get a child benefit monthly, which is great to get that little cheque in the mail, an actual cheque. Caren Heys: Doesn't get paid into an account. And you know, so it is it's it's, I mean, it's the, you want to maybe spend that money, you know, you might, you might think, oh, well this is a nice little check, but if you, if it goes straight into your account, it just becomes part of that bottomless pit of, of expenses. Caren Heys: But if you take that money and you put it towards the children's RESPs, which is a great fund in Canada that have you know, it's basically a college fund then it's, it's just so much more useful to, to, to put it towards that. I mean, this year we have a first year at university and it was [00:08:00] incredibly helpful to be able to take out those RESPs and pay that towards his tuition. Caren Heys: Now, if I, if we continue to spend that monthly little check of $300, you know, it just vanishes before your eyes, but if you put it towards the RESP, then yeah, it'll grow and that's really the seed. Vincent Heys: That's very good. Thank you. The third principle that we want to share is the wants and needs and at the base of it, it really comes back to what is the family's principles or your values in the, in the family, because that defines for one family, what is a want, and for another family that might be a need. Vincent Heys: We are Christian faith. And for us, it's important for example, that our kids go to a Christian school and obviously it in, in Canada, you have to pay for that. So private education. And so for us, that is a need and not a want. So your needs are all the let's call them basic kind of things that you, that you want to spend or that you need to [00:09:00] spend money on. Vincent Heys: And then the wants are all the nice to haves that you want to add on. So, for example, you know, Caren always says to the kids, for example, you know, sorry, we can't go on, we can't go ski for example, because we've used the money to pay for tuition, you know, for the Christian schools. So for us as a couple, it is sometimes just really important to, to list the things that we want to do all the wants because the things that Vincent wants is maybe different Vincent Heys: to what Caren wants. And so that's where the, the discussion comes in in terms of how high does this specific element rank in terms of what the wants are. Caren Heys: I think it's, it's very important to be quite clear on what the needs are and what the wants are. I think that's important. And I think when it comes to wants, say, for example, a holiday. Caren Heys: Or a new tennis racket or, you know, something like that, then it's, it's important to actually [00:10:00] identify those things. And then to save up specifically for that, right. To have maybe a separate account savings account where you can save up for those things. Vincent Heys: Yeah. And I think it just helps with the discussion, you know, it's what are the expectations for us in terms of money, you know? Vincent Heys: Okay, good. The fourth one is. Giving. So we have this principle of 70/20/10. Do you want to explain that ratio for us? Caren Heys: Yeah. So 70 is basically your spending money. I'm saying spending money, not in terms of spending money on holidays and things, but spending money. So the, your expenses and the 20% would be your savings. Caren Heys: And it's really important to make sure that there is money put away for savings because you need to have things like emergency funds. And you saving up for those wants that we just mentioned. And then the last one is the 10% that we believe you should give away. You know, just that. So that's, you're giving part and we were quite serious that that's a [00:11:00] non-negotiable principal. Vincent Heys: So the one thing that we've done for our children, especially for, for the eldest one, we had three bottles and three jars, you know, the one we marked on. Spent another one, the saving one, and then the other one, they're giving one. So if they, for example, if they had spending money well pocket money for $10, and then we would encourage them to put $7 into the one and $2, another one and another dollar in the, in the third one. Vincent Heys: And that just kind of visually helped our kids to think through what to do with, with that money as it comes in. Because obviously it's a little bit more difficult if you, if you just have a bank account. Because it's up in the air, you know, some physical cash that you have. So it's sometimes good for smaller kids just to kind of visually, see it with our son later on, he created two other accounts with that, you know, one for spend one for save Vincent Heys: well, actually, I think he had a Lego fund as well, you know, so we can spend the Lego on and then the [00:12:00] third one was forgiving. So you can actually do it with bank Caren Heys: accounts as well. I just on this just quickly for me, it's I think giving a, such an important principle and you know, I think it's so important for us to be generous. Caren Heys: We have to be having an open hand and be generous. And so, you know, just not, not just with our finances. Seeing that we talking about finances today. I mean, I was thinking about small things. Like we're not just talking about giving money to people. I was thinking of, you know, if somebody is sick and making them a meal, that type of thing. Caren Heys: So just to have a generous heart, I think is, is a very big, important principle. Vincent Heys: Okay. Principle number five. It's contentment and accountability now. I can't remember how many times I had to buy confessions for this. So contentment is really to be happy with what you have. And so we know, obviously in, in, in the investment environment that often talk about fear and greed with stock markets and so on, but this is really it's coming home. Vincent Heys: When we think about just [00:13:00] life, what fears do I have about money or what greed do I have? You know, when do I fear about stuff. And when am I greedy? When do I just want more and more and more? So that's something that I have learned and still learning is to be content with what we have and what I have and not to be greedy, what other people have right. Vincent Heys: Just, you know, that's just human nature, but that's something that we have to get right. Caren Heys: Yes. I was thinking of we did this short story when I was in high school. It's a DHR and short story and it's called the rocking horse winner. And it's there's this part where the house whispers the house has this whisper, that there must be more money and this whisper gets louder and louder all the time. Caren Heys: It actually starts with a rocking horse and then the wall starts speaking and it must be more money. And this was actually an affluent family. It wasn't a poor family. And I was just thinking about that whole principle of contentment and just thinking that for a lot of people there, they have an insatiable need for more. Caren Heys: And it's getting to that [00:14:00] point where you realize what is enough. And I think the problem is that we always compare ourselves to to people higher than us, or to people wealthier than us, or to people with more than us instead of, of being grateful. And I think that's probably. The best solution to become content is to have a grateful heart, to actually write down those things that you are grateful for, the things that you have in your family, and also to teach it to your children. Caren Heys: I mean, for my children, when they walk into a massive, big, beautiful home to say, yes, you know, we can appreciate the beauty of this house, or yes, we appreciate the beauty of the red Lamborghini, but we're just so grateful for what we have. And I think that's, that's a big thing because there's a lot of there's either people want more or they have a a fear of lack of not having enough. Caren Heys: And it's getting to that point where you realize that what you have is enough and being grateful for it. Vincent Heys: So [00:15:00] Caren I just put them on a touch on accountability and you know, we, we do talk a lot about families and children's, and I also just a little bit conscious about single people. You know, so I, I, I, you know, we just really want to encourage the singles as well. Vincent Heys: Is to have someone that you can be accountable and obviously for the married couple as well is to have your spouse to be accountable again, you know, with your spouse, with money that you spent and money that you don't spend. So just that accountability kind of thing to be over. Frank about money and just, you know, just talk about money. Vincent Heys: Really. Caren Heys: Yeah. I think, I think for me, the accountability also comes into when you are blessed with lots of finances, right. It's really important to be accountable to someone, probably outside the marriage, because I can convince you that I need that new red sports car and you know, you could probably say yes you do. Caren Heys: [00:16:00] But it's, it's, it's when you are blessed with a lot of finances that you need someone outside your household to help you to remember those things that are important to remember the open hand, the generosity. Yes, I think so. I think it's very important to be accountable to someone, even if it goes really well with you. Vincent Heys: Okay. So let's talk about practical steps to follow to really get this thing done. The first one is just start talking openly about money, you know, speak to your partner or your accountability partner, and just kind of say, you know, how do you feel about money? Because it's really emotion. We know that. Vincent Heys: I don't know what the stats is, but I think it's like 80 or 90% of our decisions are based on feelings and not on facts. So it is important to start talking about your feelings because that will change eventually what your expectations are about money is important. You know, when do you, when are you fearful and when are you greedy? Vincent Heys: So just to be honest, it's a start talking about [00:17:00] these kinds of things we think is really important. Caren Heys: I think, secondly, it's really knowing what your values are as a family. So we, we, we did this exercise with our children where we, we all wrote down the things that we think that are important for us as a family and what kind of values. Caren Heys: And then we all decided upon four or five values and we even made a family crest. We painted like a whole big you know, piece of cloth with all these values on it, just as a constant reminder of what it is. And if you know what your values are, then you know, what you, what kind of money you can spend towards things of you have a value of generosity, then it's important to give, right? Caren Heys: So it's, it's looking at your values to you know, to help you, to steer you, to steer you to boards your, your financial goals. Vincent Heys: Okay, then the third one is start small. And this is something that I've learned from a friend of mine Mike Pulon on [00:18:00] in Vancouver and he always says, you know, it's small steps in those in the same direction. Vincent Heys: So if we just think about the 70, 20 ,10 principle, it might feel a little bit daunting if you haven't saved. And if you haven't started giving, you know, to start now fresh. So what we, what we think is a good thing is just to start small. Start with the next level of increase that you will get. So let's say you get extra $500, whatever, and it's an increase maybe to start with that $500 where you save a portion and you give a portion away and then you can work yourself back into the whole system, you know, just small steps. Vincent Heys: And that will kind of create a habit over long term. Well, great. Caren, thank you so much for for joining my podcast. It was great to have you. Caren Heys: Thank you. I really enjoyed being here. Vincent Heys: Hey, thank you so much for listening to our podcast today, you can find our content on wealthstack.ca[00:19:00] or on LinkedIn. I'm Vincent Heys, and you've been listening to the financial wellness podcast series.

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