When Shannon Nash and her husband, Bill, got married in 1996 they began holding regular meetings about their finances. At the time, Bill’s job as a lieutenant in the Navy required him to be away from home for extended periods, leaving Shannon to tackle bills and execute the couple’s financial plan by herself. These meetings provided a way for them to reach an agreement about how to move their finances forward.
In the early days of their marriage, Bill had no debt at all, while Shannon had approximately $1,500 in store credit card debt and some $35,000 in graduate school loans. Together, the Nashes made a vow: No more store credit cards. The couple resolved to aggressively pay down their debts by doubling up on payments and eliminating unnecessary items from their budget. Five years later, the couple was debt-free. The Nashes say the strategy was effective because they worked as a team.
The couple has seen a few changes over the years. Bill left the Navy in 2001, and the Nash household expanded to include three sons: Jason, 11; Kyle, 5; and Logan, 1.
Even so, the couple has maintained their strict spending philosophy: “If we can’t pay for it by the end of the month, we don’t buy it.†Their discipline has paid off. They keep their credit card balances low or at zero, and they have nearly flawless credit histories. Both Shannon and Bill have credit scores in the 700s.Unlike many Americans, the Nashes, who are both 38 years old, don’t rely on credit cards. Because of the turbulent economic times, Shannon says she’s glad they never got into the habit of carrying one in their wallets. The family makes credit card purchases only if they have the cash on hand to pay the balance off in full. They have also trained themselves to ask a simple question before making any purchase: “Can you afford to pay this off?â€
In addition, the Nash family is committed to judicious tax management. Since Shannon owns a tax, business, and entertainment management company, Nash Management Group, that’s no difficult task. A lawyer and certified public accountant, Shannon started the company in 2004. The timing was right, as the family
had just returned to the States after a stint overseas, coupled with a new baby. She structured the company as an S corporation. Because she’s self-employed, Shannon monitors what she owes the government in income tax by calculating her net profit each quarter and then paying estimated taxes. She uses the Electronic Federal Tax Payment System, or EFTPS, a Web-based service provided free of charge by the U.S. Treasury.Shannon says she wants others, especially in the African American community, to be well-equipped when it comes to managing tax issues. She has even penned a well-received book on the subject entitled For the Love of Money: The 411 to Taking Control of Your Taxes and Building Your Net Worth (iUniverse Inc.; $24.95).
The Nashes stick to a budget because they don’t try to keep up with the Joneses. Instead of worrying about who has the biggest TV or the latest car, Shannon and Bill live within their means. While many Americans are now adjusting to more frugal ways, the Nash family has been living economically for some time now. Their discipline and frugality have allowed
them to amass an emergency savings fund–a key line of defense in financially prudent households–that covers three to four months of living expenses. Bill and Shannon use a simple Excel spreadsheet and conduct a comprehensive review and assessment of their finances four to six times a year.Of course, the process hasn’t been without a few hiccups. One of their first experiences in their new suburban Atlanta home was a lizard infestation–a financial curveball that cost them nearly $2,000 to resolve. The Nashes took in stride what might have thrown many couples off track for several months. However, they remain committed to their tried-and-true strategy of being responsible about their budget, credit, and tax obligations.
THE NASHES’ ADVICE
The amount of money you have coming in must exceed what’s going out. Focus on making sure that your cash flow is positive. If it’s not, you have to do something to make it positive. Start by cutting back on spending. If you’re a stay-at-home mom–or dad–you may have to go back to work at least part time.
Talk regularly about money. The sooner couples talk about finances,
the better. Each person should ask: Am I a spender or a saver? Knowing where you both stand will help you see how the other person views money management. This allows both of you to come into the house without feeling the urge to hide purchases or open a separate account that your spouse doesn’t know about.Educate yourself about taxes. Shannon says one of the best things you can do is get smart about taxes. Although many people dislike taxes and often shy away from the subject, there are many resources available. The Internal Revenue Service has helpful tools on its Website (www.irs.gov). Click on the tab labeled “individuals†for more information.
Tap into your network. The same way you might search for a doctor, ask a colleague for advice before choosing a financial professional. When evaluating tax planners, make sure they have appropriate credentials and ask about their experience. And don’t be afraid to be open and honest with them about your situation–every professional tax expert has heard your story before.
This story originally appeared in the April 2009 issue of Black Enterprise magazine.