7 Tips for Talking to Your Partner About Money

January 15, 2020

View Article
Luis Puente

Luis Puente

Financial Education

2711 LBJ Freeway Suite 300

Farmers Branch, TX 75234

Subscribe to get my Email Newsletter

January 15, 2020

7 Tips for Talking to Your Partner About Money

7 Tips for Talking to Your Partner About Money

Dealing with finances is a big part of any committed relationship and one that can affect many aspects of your life together.

The good news is, you don’t need a perfect relationship or perfect finances to have productive conversations with your partner about money, so here are some tips for handling those tricky conversations like a pro!

Be respectful
Respect should be the basis for any conversation with your significant other, but especially when dealing with potentially touchy issues like money. Be mindful to keep your tone neutral and try not to heap blame on your partner for any issues. Remember that you’re here to solve problems together.

Take responsibility
It’s perfectly normal if one person in a couple handles the finances more than the other. Just be sure to take responsibility for the decisions that you make and remember that it affects both people. You might want to establish a monthly money meeting to make sure you’re both on the same page and in the loop. Hint: Make it fun! Maybe order in, or enjoy a steak dinner while you chat.

Take a team approach
Instead of saying to your partner, “you need to do this or that,” try to frame things in a way that lets your partner know you see yourself on the same team as they are. Saying “we need to take a look at our combined spending habits” will probably be better received than “you need to stop spending so much money.”

Be positive
It can be tempting to feel defeated and hopeless that things will never get better if you’re trying to move a mountain. But this kind of thinking can be contagious and negativity may further poison your finances and your relationship. Try to focus on what you can both do to make things better and what small steps to take to get where you want to be, rather than focusing on past mistakes and problems.

Don’t ignore the negative
It’s important to stay positive, but it’s also important to face and conquer the specific problems. It gives you and your partner focused issues to work on and will help you make a game plan. Speaking of which…

Set common goals and work toward them together
Whether it’s saving for a big vacation, your child’s college fund, getting out of debt, or making a big purchase like a car, money management and budgeting may be easier if you are both working toward a common purpose with a shared reward. Figure out your shared goals and then make a plan to accomplish them!

Accept that your partner may have a different background and approach to money
We all have our strengths, weaknesses, and different perspectives. Just because yours differs from your partner’s doesn’t mean either of you are wrong. Chances are you make allowances and balance each other out in other areas of your relationship, and you can do the same with money if you try to see things from your partner’s point of view.

Discussing and managing your finances together can be a great opportunity for growth in a relationship. Go into it with a positive attitude, respect for your partner, and a sense of your common values and priorities. Having an open, honest, and trust-based approach to money in a relationship may be challenging, but it is definitely worth it.

  • Share:

January 13, 2020

How To Talk To Your Spouse About Money

How To Talk To Your Spouse About Money

Family finances isn’t always a fun topic.

But getting in the habit of discussing money early on in your relationship may help pave the way for a smoother future. Whether or not you see eye to eye, learning each other’s spending habits and budgeting styles can help avoid any financial obstacles in the future. Below are some tips on getting started!

Talk about money regularly
One of the best ways to approach a conversation about money is to decide in advance when you’re going to have it, rather than springing it on your spouse out of the blue. Family budgeting means making the time to talk upfront and staying transparent about it on a consistent basis. If you and your spouse choose to set a monthly or annual budget, commit to sitting down and reviewing family expenses at the end of each month to see what worked and what didn’t.

Start a budget
It’s easy to feel overwhelmed if you don’t have a family budget and don’t know where to start. However, with the development of mobile applications and online banking, you can now more easily track your spending habits to find ways to cut unnecessary expenses. For example, if you see that you’re going out to dinner most nights, you can try replacing one or two of those evenings out with a home cooked meal. Small changes to your routine can make saving easier than you might have thought!

Remember your budgeting goals
Budgeting comes down to a simple question—how will these money decisions affect the happiness of my family? For example, you might need to ask yourself if taking an awesome vacation to your favorite theme park will give your family more happiness than fixing your minivan from 2005. Can’t do both? You aren’t necessarily forgoing the vacation to fix your car; instead, you might need to invest in your car now rather than potentially letting a problem worsen. You might then decide to rework your budget to set aside more money every month to take the trip next year.

The key is that talking to your spouse about money may actually become more about talking to them about your goals and family. When you put it that way, it may be a much more productive and rewarding conversation!

Even if you haven’t discussed these things before you walked down the aisle, it’s never too late to sit down with your spouse. This topic will continue over time, so talking about your financials with your partner as you approach new milestones and experience different life events as a family can help you financially prepare for the future.

  • Share:

December 16, 2019

How to Make Better Financial Decisions

How to Make Better Financial Decisions

Numbers never lie, and when it comes to statistics on financial literacy, the results are staggering.

Recent studies indicate that 76% of Millennials don’t have a basic understanding of financial literacy. Combine that with having little in savings and mountains of debt, and you have the ingredients for a potential financial crisis.

It’s not only Millennials that lack a sound financial education. The majority of American adults are unable to pass: “To be financially literate is to have the knowledge, skills, and confidence to make responsible financial decisions that suit our own financial situations.”

Making responsible financial decisions based on knowledge and research are the foundation of understanding your finances and how to manage them. When it comes to financial literacy, you can’t afford not to be knowledgeable.

So whether you’re a master of your money or your money masters you, anyone can benefit from becoming more financially literate. Here are a few ways you can do just that.

Consider How You Think About Money
Everyone has ideas about financial management. Though we may not realize it, we often learn and absorb financial habits and mentalities about money before we’re even aware of what money is. Our ideas about money are shaped by how we grow up, where we grow up, and how our parents or guardians manage their finances. Regardless of whether you grew up rich, poor, or somewhere in between, checking in with yourself about how you think about money is the first step to becoming financially literate.

Here are a few questions to ask yourself:

  • Am I saving anything for the future?
  • Is all debt bad?
  • Do I use credit cards to pay for most, if not all, of my purchases?

Pay Some Attention to Your Spending Habits
This part of the process can be painful if you’re not used to tracking where your money goes. There can be a certain level of shame associated with spending habits, especially if you’ve collected some debt. But it’s important to understand that money is an intensely personal subject, and that if you’re working to improve your financial literacy, there is no reason to feel ashamed!

Taking a long, hard look at your spending habits is a vital step toward controlling your finances. Becoming aware of how you spend, how much you spend, and what you spend your money on will help you understand your weaknesses, your strengths, and what you need to change. Categorizing your budget into things you need, things you want, and things you have to save up for is a great place to start.

Commit to a Lifestyle of Learning
Becoming financially literate doesn’t happen overnight, so don’t feel overwhelmed if you’re just starting to make some changes. There isn’t one book, one website, or one seminar you can attend that will give you all the keys to financial literacy. Instead, think of it as a lifestyle change. Similar to transforming unhealthy eating habits into healthy ones, becoming financially literate happens over time. As you learn more, tweak parts of your financial routine that aren’t working for you, and gain more experience managing your money, you’ll improve your financial literacy. Commit to learning how to handle your finances, and continuously look for ways you can educate yourself and grow. It’s a lifelong process!

  • Share:

December 11, 2019

Party of Two?

Party of Two?

Life insurance is the most personal type of insurance you can have in today’s world.

But there seems to be a lot of confusion about it. Every consumer has different priorities and feelings. Add to that the fact that life insurance can be used for a variety of financial goals and needs, and you have a recipe for befuddlement.

When it comes to life insurance, most agree that if you have children, you should probably have it. There is no question. But what if you don’t have children? Do you need to purchase life insurance? Here’s why it may still be important, even if you don’t have kids now (or don’t plan to):

Many households need a dual income to survive.
Since women began entering the workforce en masse in 1960, household incomes have been on the rise. Many households have now adopted a lifestyle that depends on a dual income to maintain itself. If you’re in this situation, there might be some consequences of your life insurance decisions.

If something happened to you or your spouse, would the survivor still earn enough money to maintain their lifestyle? If the answer is no, consider how a life insurance policy might help.

Mortgage debt is big debt.
Mortgage debt in the United States is big – bigger than credit card or student loan debt. Still, mortgage debt is “healthy” debt assuming the growing equity in a home makes it worthwhile.

But mortgage debt can become a problem if a household’s income takes a hit. Life insurance can protect families from this risk by helping to pay off a mortgage, should something happen to you or your spouse. Either a term life policy or a special mortgage life policy can be used to pay off a mortgage.

Mortgage life insurance can be a nice layer of protection for couples that don’t have children but do have a mortgage.

Life insurance can be used as a savings tool.
Many life insurance policies offer a cash value. This means that certain policies can be cashed in whether or not a death has occurred. In this way, a life insurance policy can act as a savings tool.

Couples without children can pay into their policy in the form of the premiums, and then cash it out for a retirement dream: a new home, a hobby business, or an extended vacation. Using life insurance as a savings tool can offer tax benefits, a guaranteed savings method for the “savings challenged”, and a creative way to finance a dream. In short, it’s a savvy use of life insurance for couples who don’t have kids.

Funeral expenses can wipe out an emergency fund.
A life insurance policy can help cover funeral expenses for you or your spouse. This is one of the most common uses of life insurance. The average funeral today can cost between $7,000 and $10,000. That’s enough to wipe out an emergency fund, or seriously deplete it.

Having a life insurance policy in place can help cover expenses if you or your spouse were to pass away unexpectedly, so you can leave your fund for the day-to-day difficulties intact.

Whether you have children or not, a sudden illness or loss of a breadwinner can have lasting consequences for the loved ones you leave behind. Taking advantage of a well-tailored life insurance policy to shield them from an unnecessary financial burden if something were to happen is one of the best gifts you can give.

  • Share:

December 4, 2019

Why It's a Good Idea to Track Your Budget

Why It's a Good Idea to Track Your Budget

So you’re finally on board with this whole budget thing.

You’ve set up your plan. Now you’ve got a budget complete with average historical spending by category. You’ve discussed it with family members, roommates, and anyone else to whom the budget applies. You’ve checked off all the boxes. Yet somehow – at the end of the month, the math isn’t working out. The budget is busted.

What went wrong? Life is full of mysteries, like who left an empty box of cereal in the cupboard? Where are my glasses? Why won’t the baby go to sleep? And, where did all my money disappear to?

For a budget to work well, you’ll need to track it regularly and often. Many times, the reason you made a budget in the first place is that there’s very little room for error with saving and spending your money. A budget’s got to be loved and nurtured, kind of like a garden. Sometimes you have to get out there and pull some weeds or dig up a few rocks to keep it thriving.

Making Your Budget
To make your budget (if you haven’t already), there are several methods you can use. Good old pencil and paper never goes out of style. And it might help you see where you stand a little faster than potentially losing your initial momentum by learning a new “app”. Specialized software or online budgeting tools can be great – but they can also be fiddly if you’re not used to them. Rather than trying to figure out complicated menus and search for hidden buttons from the get-go, you might want to try it on paper first to work through your budget and establish a limit for each category of spending. Writing out your expenditures by hand has the added benefit of helping you face reality. It hurts a little more than automated solutions if you have to write the numbers down in black and white. If you’re good with spreadsheets, Microsoft Excel or Google Sheets can also be used to quickly build a budget without a frustrating learning curve.

Tracking Your Budget
Technology can be friend or foe in the home budget process. Even though you may have started out on paper, when it comes to tracking your spending for the long haul and in real time, technology is definitely a friend.

Mobile apps come in two forms: free and not free. We’ll focus on free apps for now because it’s consistent with the goal of keeping your spending under control.

Mint.com is owned by Intuit, famous for Quicken and Quickbooks software, and makes budget tracking very simple. Mint links to your bank account and other accounts you’d like to track, so you can see a complete view of your finances at a glance either on your mobile device or on your computer. Budgets are set automatically for each category but can be changed easily. Spending and income are also automatically tracked and categorized so you can view your progress – including budget amounts remaining for the month. Cash purchases can be added from the home screen.

Another good option is Clarity Money, which tracks spending by category but also provides an easy way to cancel subscriptions and access your free VantageScore Credit Score (by Experian). Clarity Money was featured by Google Play as a “Best of 2017” and is also available for iOS.

Paper or spreadsheet methods help to make the budgeting process more tangible. Automated tracking makes it easy to monitor your progress against your budget – and to maybe think twice about spending on impulse.

The important thing is to think of your budget like a garden – once you have it planned and laid out, it’s going to take regular maintenance to ensure it stays beautiful.

  • Share:

November 27, 2019

Allowance for Kids: Is It Still a Good Idea?

Allowance for Kids: Is It Still a Good Idea?

Perusing the search engine results for “allowance for kids” reveals something telling: The top results can’t seem to agree with each other.

Some finance articles quote experts or outspoken parents hailing an allowance, stating it teaches kids financial responsibility. Others argue that simply awarding an allowance (whether in exchange for doing chores around the house or not) instills nothing in children about managing money. They say that having an honest conversation about money and finances with your kids is a better solution.

According to a recent poll, the average allowance for kids age 4 to 14 is just under $9 per week, about $450 per year. By age 14, the average allowance is over $12 per week. Some studies indicate that, in most cases, very little of a child’s allowance is saved. As parents, we may not have needed a study to figure that one out – but if your child is consistently out of money by Wednesday, how do you help them learn the lesson of saving so they don’t always end up “broke” (and potentially asking you for more money at the end of the week)?

There’s an app for that.
Part of the modern challenge in teaching kids about money is that cash isn’t king anymore. Today, we use credit and debit cards for the majority of our spending – and there is an ever-increasing movement toward online shopping and making payments with your phone using apps like Apple Pay, Android Pay, or Samsung Pay.

This is great for the way we live our modern, fast-paced lives, but what if technology could help us teach more complex financial concepts than a simple allowance can – concepts like how compound interest on savings works or what interest costs for debt look like? As it happens, a new breed of personal finance apps for families promises this kind of functionality.

FamZoo is popular, offering prepaid cards with a matching family finance app for iOS and Android. Prepaid cards are a dime a dozen but FamZoo’s card and app do much more than just limit spending to the prepaid amount. Kids can earn interest on their savings (funded by parents), set budgets according to categories, monitor their account activity with useful charts, and even borrow money – complete with an interest charge. Sounds a bit like the real world, doesn’t it? FamZoo can be as simple or as feature-packed as you’d like, making it a good match for kids of any age.

Money habits are formed as early as age 7. If an allowance can teach kids about saving, compound interest, loan interest, and budgeting – with a little help from technology – perhaps the future holds a digital world where the two sides of the allowance debate can finally agree. As to whether your kids’ allowance should be paid upon completion of chores or not… Well, that’s up to you and how long your Saturday to-do list is!

  • Share:

October 16, 2019

Tips on Managing Money for Couples

Tips on Managing Money for Couples

Couplehood can be a wonderful blessing, but – as you may know – it can have its challenges as well.

In fact, money matters are the leading cause of stress in modern relationships. The age-old adage that love trumps riches may be true, but if money is tight or if a couple isn’t meeting their financial goals, there could be some unpleasant conversations (er, arguments) on the bumpy road to bliss with your partner or spouse.

These tips may help make the road to happiness a little easier.

1. Set a goal for debt-free living. Certain types of debt can be difficult to avoid, such as mortgages or car payments, but other types of debt, like credit cards in particular, can grow like the proverbial snowball rolling down a hill. Credit card debt often comes about because of overspending or because insufficient savings forced the use of credit for an unexpected situation. Either way, you’ll have to get to the root of the cause or the snowball might get bigger. Starting an emergency fund or reigning in unnecessary spending – or both – can help get credit card balances under control so you can get them paid off.

2. Talk about money matters. Having a conversation with your partner about money is probably not at the top of your list of fun-things-I-look-forward-to. This might cause many couples to put it off until the “right time”. If something is less than ideal in the way your finances are structured, not talking about it won’t make the problem go away. Instead, frustrations over money can fester, possibly turning a small issue into a larger problem. Discussing your thoughts and concerns about money with your partner regularly (and respectfully) is key to reaching an understanding of each other’s goals and priorities, and then melding them together for your goals as a couple.

3. Consider separate accounts with one joint account. As a couple, most of your financial obligations will be faced together, including housing costs, monthly utilities and food expenses, and often auto expenses. In most households, these items ideally should be paid out of a joint account. But let’s face it, it’s no fun to have to ask permission or worry about what your partner thinks every time you buy a specialty coffee or want that new pair of shoes you’ve been eyeing. In addition to your main joint account, having separate accounts for each of you may help you maintain some independence and autonomy in regard to personal spending.

With these tips in mind, here’s to a little less stress so you can put your attention on other “couplehood” concerns… Like where you two are heading for dinner tonight – the usual hangout (which is always good), or that brand new place that just opened downtown? (Hint: This is a little bit of a trick question. The answer is – whichever place fits into the budget that you two have already decided on, together!)

  • Share:

October 14, 2019

Getting a Degree of Financial Security

Getting a Degree of Financial Security

The financial advantage gap between having a college degree and just having a high school diploma is widening!

In 2015, the average college graduate earned 56% more than the average high school graduate. This is the widest gap between the two that the Economic Policy Institute has recorded since 1973!

This income difference is making saving for retirement difficult for millennials without a college degree. According to the Young Invincibles’ 2017 ‘Financial Health of Young America’ study, millennial college grads – even with roadblocks like student debt – have saved nearly $21,000 for retirement. That’s quite a lot more as compared to the amount saved by those with a high school diploma only: under $8,000.

However, a college grad may encounter a different type of retirement savings roadblock than a reduced income – student loan debt. But the numbers show that even with student loan debt, the advantages of having a college degree and a solid financial strategy outweigh the retirement saving power of not having a college degree.

Here’s an issue plaguing both groups: more than two-thirds of all millennial workers surveyed do not have a specific retirement plan in place at all.

Regardless of your level of education or your level of income, you can save for your retirement – and take steps toward your financial independence. Or maybe even finance a college education for yourself or a loved one down the road.

The first step to making the most of what you do have is meeting with a financial advisor who can help put you on the path to a solid financial strategy. Contact me today. Let’s work to get your money working for you.

  • Share:

September 9, 2019

The Cost of Goodbye

The Cost of Goodbye

The emotional cost of losing a loved one can’t be quantified, and knowing how to say goodbye can’t be taught so much as learned. It can be a long and difficult road for many.

Offsetting the financial aspect of that struggle can be done. Not through gimmicks or escapism, but through a real, tangible solution: Final expense plans.

A traditional funeral can cost up to $10,000. If that number seems a bit outrageous, look at how quickly some of the basic items and services can add up:

  • Cost of the grave site: $1,000
  • Cost to dig the grave: $600
  • Cost of a casket: $2,300
  • Cost of a grave liner/outer burial container: $1,000
  • Cost of a headstone: $1,500

That’s already $6,400… and says nothing of payment of mortician’s services, use of the funeral home, the fee for the funeral director, the cost of flowers, and more details that one never thinks about until they’re in a position where they need to think about it. These costs will vary by geographic location, but one thing you can count on is that the emotional cost you or your loved ones experience later could be compounded with financial cost that could be avoided with a bit of careful preparation now.

In the face of losing someone you love, finances might be the last thing on your mind. With a solid final expense plan, you can keep it that way.

  • Share:

August 12, 2019

The Black Hole of Checking (Part 2)

The Black Hole of Checking (Part 2)

Previously on “The Black Hole of Checking”…

In Part 1, we learned that any object pulled into a black hole will be stretched into the shape of spaghetti through a process called – wait for it – spaghettification. If you threw your shoe into it, the black hole’s gravity would stretch and compress your footwear into an unimaginably thin leather noodle as it was pulled deeper and deeper into the hole. Your shoe would be unrecognizable by the time gravity had its way.

The same thing can happen to the money in your checking account. Having a child, replacing an old automobile with something newer and more reliable, or taking a last-minute trip to see the grandparents in Florida over the holidays, can put a strain on your finances and stretch your reserves farther than you might have anticipated. As new bills create a bigger and bigger hole in your budget, your financial strategy may become something you don’t recognize.

Here in Part 2, let’s talk about how assigning an identity to your money can keep your financial goals on track, and help reduce the stretching of finite resources.

For example, say you keep all of your money in your checking account. Simple is better, right? If you want to go on a family vacation, you’ll just withdraw the funds from your account. Paying in cash to secure a “great” package deal up front? You’re all over that. But what happens if you pick up some souvenirs for Uncle Bob and Aunt Alice? Hmmm…if you get something for them you’ll have to get something for Greg and Susan too. (You’ll never make that mistake again.) And you just have to try that chic little cafe that you read about – you may never pass this way again. (But how can they get away with charging that much for a mimosa?!) Buy One, Get One all day pass at “The Biggest Miniature Museum in the World”? Let’s do it!

When you’re on vacation – having fun and enjoying yourself – it might be hard to resist taking advantage of unique experiences or grabbing those unusual gifts you didn’t account for. On the other hand, you may have no problem being thrifty when travelling, but what if someone gets sick or injured and needs hospital care on the road, or the car breaks down, or there is unexpected bad weather and you have to stay an extra day or two at the hotel?

After it’s all said and done, when you return home from your fun-filled trip, you may find a gaping hole where you had a pile of cash at the beginning of the month. If you had given your money a specific role before you planned your vacation, you may not have had such a shock when you got home – and you can enjoy your memories knowing you stayed on track with your financial goals.

Give your money identity, purpose, and the potential to grow by separating it into designated accounts. Try these 3 for starters:

1. Emergency Fund. Leaky roof? Flat tire? Trip to the emergency room? Maybe you’re great at resisting impulse buys (like those fabulous shoes you spied the other day), but sometimes things happen that are out of your control. Your emergency fund is for situations like these. Unexpected, unplanned-for expenses can derail a financial strategy very quickly if you’re not prepared.

The most important thing to keep in mind about this account? Do. Not. Touch. It. Unless there’s an emergency, of course. Then replace the money in the account as quickly as possible until it’s fully funded again.

How much should you keep in your emergency fund? A good rule of thumb is to shoot for at least $1,000, then build it to 3-6 months of your annual income. However much you decide suits your financial goals, just make sure you aren’t dipping into it when you don’t have an emergency. (Note: Grabbing a great pair of heels on sale is not an emergency.)

2. Retirement Fund. If you want to retire at some point (and most of us do), this one is a no-brainer. Odds are you’ve already begun to set aside a little something for the day you can trade in your suit and tie for a Hawaiian shirt and a pair of flip-flops, but is your retirement fund in the right place now? Unlike a day-to-day checking account with a very low or non-existent interest rate, your retirement fund should be in a separate account that has some power behind it. You’re taking the initiative to put away money for your future – get it working for you! Your goal should be to grow your retirement fund in an account with as high of an interest rate as you can find.

3. Fun Fund. This category may seem frivolous if you’re trying to stick to a well-structured financial plan, but it’s actually an important piece that can help make your budget “work”! Depending on your priorities, you might contribute a little or a lot to this account, but making some room for fun might make it more palatable to save long-term.

You might try setting aside 10% of your paycheck for fun and entertainment and see how that works – is that too much or not enough? Bonus: this is easy to calculate each month. If you’re bringing in $2,000 per month, put no more than $200 in your Fun Fund.

What you do with your Fun Fund is your choice. Will it be more of a vacation fund or a concert fund? A wardrobe fund or a theme park fund? It’s all up to you. And when the rest of your money has a purpose and is growing for your future, you might feel less guilty about snagging those hot shoes you’ve had your eye on when they finally do get marked down.

Don’t let your goals and your money get lost in a black hole of coulda, woulda, shoulda. What kind of purpose do you want to give your money? I can help!

  • Share:

August 5, 2019

Worry Once. Suffer Twice.

Worry Once. Suffer Twice.

If you Google “how to be financially independent,” over 4 million search results come back.

And for a good reason: People are really worried about their finances. Last year, 76% of Americans experienced some kind of financial worry.

Do any of these top 5 concerns feel true for you?

1. Health Care Expenses/Bills – 35%
2. Lack of Emergency Savings – 35%
3. Lack of Retirement Savings – 28%
4. Credit Card Debt – 27%
5. Mortgage/Rent Payments – 19%

If worrying means that you suffer twice, millions of people are suffering twice over their finances.

What kind of double-suffering are you experiencing – and are you ready for a way out?

The best way to learn and achieve financial independence is with someone who already knows – an ally to walk the road with you. Someone who has been where you are. Someone with the tools to help you. Contact me today, and together we can get you moving towards financial independence – and some peace of mind.

  • Share:

July 8, 2019

How to Avoid Financial Infidelity

How to Avoid Financial Infidelity

If you or your partner have ever spent (a lot of) money without telling the other, you’re not alone.

This has become such a widespread problem for couples that there’s even a term for it: Financial Infidelity.

Calling it infidelity might seem a bit dramatic, but it makes sense when you consider that finances are the leading cause of relationship stress. Each couple has their own definition of “a lot of money,” but as you can imagine, or may have even experienced yourself, making assumptions or hiding purchases from your partner can be damaging to both your finances AND your relationship.

Here’s a strategy to help avoid financial infidelity, and hopefully lessen some stress in your household:

Set up “Fun Funds” accounts.

A “Fun Fund” is a personal bank account for each partner which is separate from your main savings or checking account (which may be shared).

Here’s how it works: Each time you pay your bills or review your whole budget together, set aside an equal amount of any leftover money for each partner. That goes in your Fun Fund.

The agreement is that the money in this account can be spent on anything without having to consult your significant other. For instance, you may immediately take some of your Fun Funds and buy that low-budget, made-for-tv movie that you love but your partner hates. And they can’t be upset that you spent the money! It was yours to spend! (They might be a little upset when you suggest watching that movie they hate on a quiet night at home, but you’re on your own for that one!)

Your partner on the other hand may wait and save up the money in their Fun Fund to buy $1,000 worth of those “Add water and watch them grow to 400x their size!” dinosaurs. You may see it as a total waste, but it was their money to spend! Plus, this isn’t $1,000 taken away from paying your bills, buying food, or putting your kids through school. (And it’ll give them something to do while you’re watching your movie.)

It might be a little easier to set up Fun Funds for the both of you when you have a strategy for financial independence. Contact me today, and we can work together to get you and your loved one closer to those beloved B movies and magic growing dinosaurs.

  • Share:


June 19, 2019

Making Money Goals That Get You There

Making Money Goals That Get You There

Setting financial goals is like hanging a map on your wall to inspire and motivate you to accomplish your travel bucket list.

Your map might have your future adventures outlined with tacks and twine. It may be patched with pictures snipped from travel magazines. You would know every twist and turn by heart. But to get where you want to go, you still have to make a few real-life moves toward your destination.

Here are 5 tips for making money goals that may help you get closer to your financial goals:

1. Figure out what’s motivating your financial decisions. Deciding on your “why” is a great way to start moving in the right direction. Goals like saving for an early retirement, paying off your house or car, or even taking a second honeymoon in Hawaii may leap to mind. Take some time to evaluate your priorities and how they relate to each other. This may help you focus on your financial destination.

2. Control Your Money. This doesn’t mean you need to get an MBA in finance. Controlling your money may be as simple as dividing your money into designated accounts, and organizing the documents and details related to your money. Account statements, insurance policies, tax returns, wills – important papers like these need to be as well-managed as your incoming paycheck. A large part of working towards your financial destination is knowing where to find a document when you need it.

3. Track Your Money. After your money comes in, where does it go out? Track your spending habits for a month and the answer may surprise you. There are a plethora of apps to link to your bank account to see where things are actually going. Some questions to ask yourself: Are you a stress buyer, usually good with your money until it’s the only thing within your control? Or do you spend, spend, spend as soon as your paycheck hits, then transform into the most frugal individual on the planet… until the next direct deposit? Monitor your spending for a few weeks, and you may find a pattern that will be good to keep in mind (or avoid) as you trek toward your financial destination.

4. Keep an Eye on Your Credit. Building a strong credit report may assist in reaching some of your future financial goals. You can help build your good credit rating by making loan payments on time and reducing debt. If you neglect either of those, you could be denied for mortgages or loans, endure higher interest rates, and potentially difficulty getting approved for things like cell phone contracts or rental agreements which all hold you back from your financial destination. There are multiple programs that can let you know where you stand and help to keep track of your credit score.

5. Know Your Number. This is the ultimate financial destination – the amount of money you are trying to save. Retiring at age 65 is a great goal. But without an actual number to work towards, you might hit 65 and find you need to stay in the workforce to cover bills, mortgage payments, or provide help supporting your family. Paying off your car or your student loans has to happen, but if you’d like to do it on time – or maybe even pay them off sooner – you need to know a specific amount to set aside each month. And that second honeymoon to Hawaii? Even this one needs a number attached to it!

What plans do you already have for your journey to your financial destination? Do you know how much you can set aside for retirement and still have something left over for that Hawaii trip? And do you have any ideas about how to raise that credit score? Looking at where you are and figuring out what you need to do to get where you want to go can be easier with help. Plus, what’s a road trip without a buddy? Call me anytime!

… All right, all right. You can pick the travel tunes first.

  • Share:


June 17, 2019

How Much Life Insurance Do You Really Need?

How Much Life Insurance Do You Really Need?

Whenever you’re asked about choosing a new life insurance policy or adding additional coverage, do you have any of the following reactions?

1. “No way. We took care of this years ago. Having some kind of life insurance policy is what you’re supposed to do.”

2. “Well, it is only a few more dollars each month… But what if we never end up using the benefits of that rider? What if I could spend that extra money on something more important now, like getting that new riding lawn mower I wanted?”

3. “ANOTHER RIDER FOR MY POLICY?! Sign me up!”

Even though there might be some similar responses when faced with a decision to upgrade what you already have, with the right guidance, you can finance a policy that has the potential to protect what is most important to you and your family, fit your needs, and get you closer to financial independence.

The most honest answer I can give you about how much life insurance you really need? It’s going to depend on you and your goals.

General rules of thumb on this topic are all around. For instance, one “rule” states that the death benefit payout of your life insurance policy should be equal to 7-10 times the amount of your annual income. But this amount alone may not account for other needs your family might face if you suddenly weren’t around anymore…

  • Paying off any debt you had accrued
  • Settling final expenses
  • Continuing mortgage payments (or surprise upkeep costs)
  • Financing a college education for your kids
  • Helping a spouse continue on their road to retirement

And these are just a few of the pain points that your family might face without you.

So beyond a baseline of funds necessary for your family to continue with a bit of financial security, how much life insurance you require will be up to you and what your current circumstances allow.

If you’ve had enough of a guesswork, reactionary approach to how you’ll provide for your loved ones in case of an unexpected tragedy, give me a call. We’ll work together to tailor your policy to your needs!

  • Share:


May 15, 2019

3 Advantages to Being the Early Bird

3 Advantages to Being the Early Bird

Extra-large-blonde-roast-with-a-double-shot-of-espresso, anyone?

As the old saying goes, “The early bird catches the worm.” But not everyone is an early riser, and getting up earlier than usual can throw off a night owl’s whole day.

But there are a couple of things that, if started early in life (and with copious amounts of caffeine, if you’re starting early in the day, too), could benefit you greatly later in life. For example, learning a second language.

The optimal age range for learning a second language is still up for debate among experts, but the consensus seems to be “the younger you start, the better.” It’s a good idea to start early – giving your brain an ample amount of time to develop the many agreed upon benefits of being bilingual that don’t show up until later in life:

  • Postponed onset of dementia and Alzheimer’s (by 4.5 years)
  • Much more efficient brain activity – more like a young adult’s brain
  • Greater cognitive reserve and ability to cope with disease

Imagine combining that increased brain power with a comfortable retirement – an important goal to start working towards early in life!

Here are 3 big advantages to starting your retirement savings early:

1. Less to put away each month.
Let’s say you’re 40 years old with little to no savings for retirement, but you’d like to have $1,000,000 when you retire at age 65. Twenty-five years may seem like plenty of time to achieve this goal, so how much would you need to put away each month to make that happen?

If you were stuffing money into your mattress (i.e., saving with no interest rate or rate of return), you would need to cram at least $3,333.33 in between the layers of memory foam every month. How about if you waited until you were 50 to start? Then you’d need to tuck no less than $5,555.55 around the coils. Every. Single. Month.

A savings plan that aggressive is simply not feasible for a majority of North Americans. Nearly half of Canadians are just getting by, living paycheck-to-paycheck. So it makes sense that the earlier you start saving for retirement, the less you’ll need to put away each month. And the less you need to put away each month, the less stress will be put on your monthly budget – and the higher your potential to have a well-funded retirement when the time comes.

But what if you could start saving earlier and apply an interest rate? This is where the second advantage comes in…

2. Power of compounding.
The earlier you start saving for retirement, the longer amount of time your money has to grow and build on itself. A useful shortcut to figuring out how long it would take your money to double is the Rule of 72.

Never heard of it? Here’s how it works: Take the number 72 and divide it by your annual interest rate. The answer is approximately how many years it will take for money in an account to double.

For example, applying the Rule of 72 to $10,000 in an account at a 4% interest rate would look like this:

72 ÷ 4 = 18

That means it would take approximately 18 years for $10,000 to grow to $20,000 ($20,258 to be exact).

Using this formula reveals that the higher the interest rate, the less time it’s going to take your money to double, so be on the lookout for the highest interest rate you can find!

Getting a higher interest rate and combining it with the third advantage below? You’d be on a roll…

3. Lower life insurance premiums.
A well-tailored life insurance policy may help protect retirement savings. This is particularly important if you’re outlived by your spouse as he or she approaches their retirement years.

End-of-life costs can deal a serious blow to retirement savings. If you don’t have a strategy in place to help cover funeral expenses and the loss of income, the money your spouse might need may have to come out of your retirement savings.

One reason many people don’t consider life insurance as a method of protecting their retirement is that they think a policy would cost too much.

How much do you think a $250,000 term life insurance policy would cost for a healthy 30-year-old?

Less than $14 per month. That’s a cost that would easily fit into most budgets!

You may still need a little caffeine for the extra kick to get an early start on powering up your brain (or your retirement savings), but sacrificing a few brand-name cups of coffee per month could finance a well-tailored life insurance policy that has the potential to protect your retirement savings.

Contact me today, and together we can work on your financial strategy for retirement, including what kind of life insurance policy would best fit you and your needs. As for your journey to the brain-boosting benefits of being bilingual – just like with retirement, it’s never too late to start. And I’ll be here to cheer you on every step of the way!

  • Share:


May 13, 2019

6 Financial Commitments EVERY Parent Should Educate Their Kids About

6 Financial Commitments EVERY Parent Should Educate Their Kids About

Your first lesson isn’t actually one of the six.

It can be found in the title of this article. The best time to start teaching your children about financial decisions is when they’re children! Adults don’t typically take advice well from other adults (especially when they’re your parents and you’re trying to prove to them how smart and independent you are).

Heed this advice: Involve your kids in your family’s financial decisions and challenge them with game-like scenarios from as early as their grade school years.

Starting your kids’ education young can help give them a respect for money, remove financial mysteries, and establish deep-rooted beliefs about saving money, being cautious regarding risk, and avoiding debt.

Here are 6 critical financially-related lessons EVERY parent should foster in the minds of their kids:

1. Co-signing a loan

The Mistake: ‘I’m in a good financial position now. I want to be helpful. They said they’ll get me off the loan in 6 months or so.’

The Realities: If the person you’re co-signing for defaults on their payments, you’re required to make their payments, which can turn a good financial situation bad, fast. Also, lenders are not incentivized to remove co-signers – they’re motivated to lower risk (hence having a co-signer in the first place). This can make it hard to get your name off a loan, regardless of promises or good intentions. Keep in mind that if a family member or friend has a rough credit history – or no credit history – that requires them to have a co-signer, what might that tell you about the wisdom of being their co-signer? And finally, a co-signing situation that goes bad may ruin your credit reputation, and more tragically, may ruin your relationship.

The Lesson: ‘Never, ever, EVER, co-sign a loan.’

2. Taking on a mortgage payment that pushes the budget

The Mistake: ‘It’s our dream house. If we really budget tight and cut back here and there, we can afford it. The bank said we’re pre-approved…We’ll be sooo happy!’

The Realities: A house is one of the biggest purchases couples will ever make. Though emotion and excitement are impossible to remove from the decision, they should not be the driving forces. Just because you can afford the mortgage at the moment, doesn’t mean you’ll be able to in 5 or 10 years. Situations can change. What would happen if either partner lost their job for any length of time? Would you have to tap into savings? Also, many buyers dramatically underestimate the ongoing expenses tied to maintenance and additional services needed when owning a home. It’s a general rule of thumb that home owners will have to spend about 1% of the total cost of the home every year in upkeep. That means a $250,000 home would require an annual maintenance investment of $2,500 in the property. Will you resent the budgetary restrictions of the monthly mortgage payments once the novelty of your new house wears off?

The Lesson: ‘Never take on a mortgage payment that’s more than 25% of your income. Some say 30%, but 25% or less may be a safer financial position.’

3. Financing for a new car loan

The Mistake: ‘Used cars are unreliable. A new car will work great for a long time. I need a car to get to work and the bank was willing to work with me to lower the payments. After test driving it, I just have to have it.’

The Realities: First of all, no one ‘has to have’ a new car they need to finance. You’ve probably heard the expression, ‘a new car starts losing its value the moment you drive it off the lot.’ Well, it’s true. According to CARFAX, a car loses 10% of its value the moment you drive away from the dealership and another 10% by the end of the first year. That’s 20% of value lost in 12 months. After 5 years, that new car will have lost 60% of its value. Poof! The value that remains constant is your monthly payment, which can feel like a ball and chain once that new car smell fades.

The Lesson: ‘Buy a used car you can easily afford and get excited about. Then one day when you have saved enough money, you might be able to buy your dream car with cash.’

4. Financial retail purchases

The Mistake: ‘Our refrigerator is old and gross – we need a new one with a touch screen – the guy at the store said it will save us hundreds every year. It’s zero down – ZERO DOWN!’

The Realities: Many of these ‘buy on credit, zero down’ offers from appliance stores and other retail outlets count on naive shoppers fueled by the need for instant gratification. ‘Zero down, no payments until after the first year’ sounds good, but accrued or waived interest may often bite back in the end. Credit agreements can include stipulations that if a single payment is missed, the card holder can be required to pay interest dating back to the original purchase date! Shoppers who fall for these deals don’t always read the fine print before signing. Retail store credit cards may be enticing to shoppers who are offered an immediate 10% off their first purchase when they sign up. They might think, ‘I’ll use it to establish credit.’ But that store card can have a high interest rate. Best to think of these cards as putting a tiny little ticking time bomb in your wallet or purse.

The Lesson: ‘Don’t buy on credit what you think you can afford. If you want a ‘smart fridge,’ consider saving up and paying for it in cash. Make your mortgage and car payments on time, every time, if you want to help build your credit.’

5. Going into business with a friend

The Mistake: ‘Why work for a paycheck with people I don’t know? Why not start a business with a friend so I can have fun every day with people I like building something meaningful?’

The Realities: “This trap actually can sound really good at first glance. The truth is, starting a business with a friend can work. Many great companies have been started by two or more chums with a shared vision and an effective combination of skills. If either of the partners isn’t prepared to handle the challenges of entrepreneurship, the outcome might be disastrous, both from a personal and professional standpoint. It can help if inexperienced entrepreneurs are prepared to:

  • Lose whatever money is contributed as start-up capital
  • Agree at the outset how conflicts will be resolved
  • Avoid talking about business while in the company of family and friends
  • Clearly define roles and responsibilities
  • Develop a well-thought out operating agreement

The Lesson: ‘Understand that the money, pressures, successes, and failures of business have ruined many great friendships. Consider going into business individually and working together as partners, rather than co-owners.’

6. Signing up for a credit card

The Mistake: ‘I need to build credit and this particular card offers great points and a low annual fee! It will only be used in case of emergency.’

The Reality: There are other ways to establish credit, like paying your rent and car loan payments on time. The average American household carries a credit card balance averaging over $16,000. Credit cards can lead to debt that may take years (or decades) to pay off, especially for young people who are inexperienced with budgeting and managing money. The point programs of credit cards are enticing – kind of like when your grocer congratulates you for saving five bucks for using your VIP shopper card. So how exactly did you save money by spending money?

The Lesson: ‘Learn to discipline yourself to save for things you want to buy and then pay for them with cash. Focus on paying off debt – like student loans and car loans – not going further into the hole. And when you have to get a credit card, make sure to pay it off every month, and look for cards with rewards points. They are, in essence, paying you! But be sure to keep Lesson 5 in mind!’

  • Share:


May 8, 2019

What is your #1 financial asset?

What is your #1 financial asset?

What is your #1 financial asset? It’s not your house, your retirement fund, or your rare baseball card collection gathering dust.

Your most valuable financial asset is YOU!
Today – Labor Day, the unofficial last day of summer – let’s look at ways you can develop your skills and outlook in the workforce as we move from summertime vacation mode into finishing 2018 strong.

You might be savvy at home improvement, you might be a whiz with your finances, or you might have the eye to spot a hidden treasure at a yard sale, but how do you increase your value as a laborer in the workforce? One of the top traits of successful people is that they come up with a plan and they execute. Waiting for things to happen or taking the crumbs life tosses their way isn’t on their to-do list. Whether you’re dreaming of a secure future for yourself and your family, or if you want to build a career that enables you to help others down the road (or both!), the path to your goal and how fast you get there is up to you.

Increase your value as an employee
Working for someone else doesn’t have to feel like a prison sentence. In a recent study, nearly 60% of entrepreneurs worked full time as an employee for someone else while planning and building their own business on the side. Being employed is a chance to learn alongside experienced mentors, and prime time to experiment with how you can best add value. In many cases, successful entrepreneurs spent their time in the workforce amassing a wealth of information on how businesses are run, making mental notes on what doesn’t work, and practicing what can be done better.

View your time as an employee as an opportunity to hone your problem solving skills. It’s a mindset – one that can make you a more valuable employee and prepare you for great things later. Being seen as a problem solver can grant you more opportunity for promotions, pay increases, greater responsibility, and perhaps most importantly, open up more chances for life-enriching experiences.

Build your financial strategy
While you’re working to increase your value as a laborer, you’ll benefit from steady footing before taking your next big step. This is where building a solid financial strategy comes into play. Nearly everyone has the potential to be financially secure. Where most find trouble is often due to not having a plan or not sticking to the plan. A few simple principles can guide your finances, setting you up for a future where you have freedom to choose the life you envision.

  • Pay yourself first. Starting early and continuing as your earnings grow, begin the habit of paying yourself first. Simply, this means putting away some money every month or every paycheck that can help you reach your financial goals over time. Ideally, this money will be invested where it can grow. The goal is to get the money out of harm’s way, where you would have to think twice before dipping into your savings before you spend.
  • Develop a budget and consider expenses carefully. Think about expenditures before opening your wallet and swiping that credit card. Avoid debt wherever possible. Most people are able to have more money left over at the end of the month than they might realize. Don’t be afraid to tell yourself “no” so you can reach a bigger goal.
  • Plan for loved ones with life insurance. Here is where the value you provide your family through your hard work comes into sharp focus. Life insurance is essentially income replacement, should the worst happen. Meet with your financial professional and put a tailored-to-you life insurance policy in place that assures your family or dependents are taken care of.

Put your skills to work as a leader
Once you’ve established a level of financial security, now is the time to think about giving back by providing opportunities and helping others to realize their goals. There’s an old saying: “You’ll never get rich working for someone else.” While that’s not always true, trying to realize your long-term financial goals in an entry-level position might be an uphill climb. Moving up into a leadership position can teach you new skills and can increase your earning power. The average salary for managers approaches six figures!

You might even be ready to branch out on your own, investing the knowledge and leadership skills you’ve gained over the years in your own venture. Consider becoming an entrepreneur with your own financial services business – this can allow you to help others while building on your continuing success as a financial professional.

Whether you choose to strike out on your own, start a new part-time business, or grow within the organization or industry you’re in now, there are key traits that will help you succeed. Having a future-driven, forward-thinking mindset will guide your decisions. Your sense of commitment and the leadership skills you’ve honed on your journey will define your career – and perhaps even your legacy – as others learn from your example and use the same principles to guide their own success.

  • Share:

May 6, 2019

Quick Guide: Life Insurance for Stay-at-Home Parents

Quick Guide: Life Insurance for Stay-at-Home Parents

Life insurance is vitally important for any young family just starting out.

Milestones like buying a home, having a baby, and saving for the future can bring brand new challenges. A solid life insurance strategy can help with accommodating the needs of a growing family in a new phase of life.   A life insurance policy’s benefits can

  • Replace income
  • Pay off debt
  • Cover funeral costs
  • Finance long-term care
  • And even more, depending on the type of policy you have.

And replacing family income doesn’t only mean covering the lost income of one earning parent.

Replacing the loss of income provided by a stay-at-home parent is just as important.   According to Salary.com, if a stay-at-home mom were to be compensated monetarily for performing her duties as a mother, she should receive $143,102 annually. That number factors in important services like childcare, keeping up the household, and providing transportation. Sudden loss of those services can be devastating to the way a family functions as well as expensive to replace.

Stay-at-home parents need life insurance coverage, too.

Contact me today to learn more about getting the life insurance coverage you need for your family and building a financial plan that will provide for your loved ones in case a traumatic life event occurs.

  • Share:


April 17, 2019

Handling your car loan like a boss

Handling your car loan like a boss

Cars may be necessary to get around, but they can be expensive.

At some point, many of us will need to finance a car. Coming up with enough cash to buy a car outright – even a used car – can be difficult. Enter the auto loan.

Financing a car isn’t all bad, especially if you follow a few best practices that can help keep your car loan in good shape. Avoiding the dreaded upside down car loan – owing more on your car than it’s worth – is the name of the game when it comes to a good automobile loan.

Why do car loans go upside down?
Being upside down on your car loan is surprisingly common. It happens to many of us, and the root cause is depreciation. Depreciation is the decline in value of a good or product over time. Many physical goods depreciate – furniture, electronics, clothing, and cars.

There is a saying that a car begins depreciating as soon as you drive it off the lot. Unlike a good such as fine art or precious stones that you would expect to appreciate over time, a car usually will lose its value over time.

For example, say you buy a new car for $25,000. After three months your car depreciates by $3,000, so it’s now worth $22,000. If your down payment was less than $3,000 or you didn’t use a down payment at all, you are now upside down – owing more money on your car than it’s actually worth.

Some cars, however, hold their value better than others. Luxury cars have a slower depreciation rate than an inexpensive compact car. The popularity of a vehicle can also affect depreciation rates.

What happens when you’re upside down on a car loan?
Being upside down on your car loan may actually not mean much unless you’re involved in a loss and your car gets totaled. Assuming you have proper auto insurance, your policy should pay out the actual cash value of your totaled vehicle, which may not be enough to pay off the remaining balance of your auto loan. Then you’re stuck paying the balance on a loan for a car that you don’t have anymore. That is why it’s essential to avoid being upside down in your car loan.

Strategies to keep your car loan healthy
Keeping your car loan right side up starts with putting a healthy down payment on your car. Typically, a 20 percent down payment may give you enough equity right off the bat to keep your car loan from going upside down when the vehicle begins depreciating. So, if you’re purchasing a $25,000 car, aim to put at least $6,000 down.

Another way to avoid being upside down on your car loan is to select the shortest repayment term possible. If you can afford it, consider a 36-month repayment plan. Your monthly payments may be a bit higher, but the chances of your loan going upside down may be less.

Choose carefully
Keeping your car loan from going upside down is important. Make sure you have a healthy down payment, shop for vehicles within your budget, and stick to the shortest repayment term you can afford. Simple strategies can help make sure your car loan stays in the black.

  • Share:


This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies that may be available to you. Before taking out any loan or enacting a funding strategy, seek the advice of a licensed financial professional, accountant, and/or tax expert to discuss your options.

April 10, 2019

When should you see a financial professional?

When should you see a financial professional?

Just about anyone may benefit from seeing a financial professional, but how do you know when it’s time to get some professional guidance?

Many people work through much of their financial life without needing to talk to a financial professional, but then something may change. Maybe you are approaching retirement and want to make sure you have your bases covered. Perhaps you just received an inheritance and aren’t quite sure what to do with it, or maybe you received a big promotion with a substantial raise and want a little help with your existing financial strategy.

Whatever the case may be, here are a few signposts that indicate it may be time to see a financial professional.

You are unsure about your financial future
If when thinking about your financial future, and you keep coming up with a blank slate, a financial professional may help you formulate a solid savings strategy. If you’re feeling overwhelmed by differing financial responsibilities, a conversation with a financial professional may help you sort it all out and develop a roadmap. If you’re juggling a lot of financial balls, such as student loan debt, retirement savings, credit card debt, building an emergency fund, trying to buy a house, etc., you may benefit from some professional financial input.

You have inherited a large sum of money
Coming in to an inheritance is a key signal to seek out a financial professional. A financial professional may be able to help you determine the options you have to manage the money that you may not be aware of. The important thing with an inheritance is to take your time when making decisions and consider any long term implications for your family.

You want a professional opinion
Say you like managing your own money, and you’ve been doing a pretty good job of it. You read the financial news and keep up with the latest from Wall Street. You may feel you’re doing just fine without the help of a financial professional, and that’s great. But, getting a second opinion on your finances from a qualified financial professional may go a long way.

Sometimes with our finances we may have a blind spot – a risk we may not see, or an opportunity to do something better that we haven’t noticed. A financial professional may help you find those opportunities and help eliminate those risks. Even if your finance game is on a roll, a little professional guidance may help make it even better.

  • Share:

Subscribe to get my Email Newsletter