Do you talk finances with your spouse? No? Well, you should. As awkward as it maybe, it is so important to have regular discussions over your financial situation.
Now, I know this might be tough if there is a dark cloud over your finances, and may cause disagreements, but sweeping it under the rug only makes it worse. I assume there is some sort of discussion related to this subject, but is it a quick “honey, did you pay the rent?” or is it a full-on conversation related to goal setting, where you are at, where you want to be, and the steps you are taking to get there? There is a HUGE difference. Don’t get me wrong, you can still ask if the rent is paid but having the actual in-depth discussion behind that question is what is so important.
Finances are one of the biggest causes of divorce in the US. I don’t mean to be a Debby downer, but it is a fact. By having these discussions and putting the work into creating a successful financial future, this can help you to avoid being in that statistic.
To make this a little less awkward, I have some tips to help lighten the load:
- Icebreaker: That initial conversation is probably going to be the toughest to start. Make it comfortable. Schedule a time to sit down to a nice dinner or get in your pjs and talk money with pizza. Anything to make the situation more relaxed. Try to start by discussing the positives of your finances. Maybe you saved an extra $300 this month, or you raised your 401k contribution, literally anything positive. Doing this can help get you both in a good mood. If there is nothing positive to start off with, maybe bring in a solution to an issue. Say you have a massive medical bill due this month, instead of just looking at the fact that you are going to spend a ton of money that maybe you do not have, look on the bright side that at least after this month you won’t have that bill and you can put that money into savings next month. Get creative and try to keep the mood light. The discussion will be more productive if you are both happy.
- Do not lie: This is probably THE most important tip I can share. Hiding items related to money is the easiest way to cause an argument and create issues. It is so much better to get everything out into the open so together you can take the steps to make it right. No matter how embarrassing it is, or how big of a burden it may be, you are in this together. In my opinion, I would much rather hear the bad news up front and work through it than be lied to about it as the problem is getting much bigger. Be open and communicate the issues. This is so important.
- Use tools: There are so many resources out there to help you reach your financial goals. From budgeting websites, spreadsheets, templates, books, the list goes on and on. Find a tool that works best for you and your spouse. If you budget monthly and like apps there are sites such as Mint or Everydollar. If you budget weekly and like to have a paper copy, maybe you find a spreadsheet that you can fill in. Anything to help make it easier. This can also help make future conversations a breeze to get through. On top of that, you will visually be able to see how you are doing and stay on track.
- Make goals: By setting financial goals you and your spouse will have something to work towards. Instead of waiting for the next paycheck to blow on food- guilty, say you made a goal to pay off your car 1 year quicker, now you have a purpose for the money that betters your future. These goals can be short term or long term, or even better a mix of both. Consider writing these down somewhere, your phone, computer, notebook, etc. Being able to see them will help make it harder to give up on them. Make sure they are goals you both agree on and benefit you both.
- Make a plan and stick to it: Whether this is a budget, or a 5- year plan, make a plan. Discussing what you want to achieve and talking about how to get there is a great step, but really getting down deep and planning everything out will help you realize what you have to look forward to, what you can do right now, or where you are making mistakes. If you do not have a basic household budget yet, that might be a good place to start. Find a way that works best with your pay schedules and stick to the budget. From there, start making a longer-term plan. For example: In 5 years you and your spouse are going to build a house and to get there, year 1 you are going to cut the amount you eat out in half every month and put that money into savings, year 2 you are going to do so and so…and year 3 and 4 and so on until you build the house. Hang your plan on your fridge and talk about it frequently. Keep your budget, or plan in front of you so you can keep each other accountable if one of you starts to fall of track. Teamwork makes the dream work!
Hopefully these tips help you and your spouse start the conversation for your financial future. Talking about money does not have to be awkward. If you take the time to create a more relaxed environment and discuss the positive things you have or can do, in my experience, it helps so much. This is the person you are stuck with forever, make sure you are both on the right page to have a successful future!
Written By: Dakota Otis
Earlier this week, we talked about 5 simple ways to get your financial sh*t together in 2019. If you’re looking for that article, here it is! If you have been sitting on the edge of your seat waiting eagerly for the 5 MORE ideas to tackle your finances in the new year…well, my friend, you need to get a life. (Just kidding! You’re my favorite). Wait no longer. Here are 5 MORE ideas to show your finances who’s boss in 2019:
- Start that Side Hustle
Everybody’s got a knack for something. Whether it’s photography, writing, event planning, car-fixing, baking, nannying, or playing music, your “knack” can be turned into a side-hustle money maker. The New Year is an excellent time to begin monetizing your skill set.
Think you don’t have any valuable skills that can translate into a profitable business? Think again. Can you drive a car? (Think: Uber and Lyft). Can you put together a piece of IKEA furniture faster than your mom can say, “Honey, make sure you read the instructions”? (Think: TaskRabbit) Can you speak English? (I hope so if you’re reading this article. Think: Teaching English online through VIPKID). Can you take a BuzzFeed survey to find out what your spirit animal is? (Think: SwagBucks). Can you walk someone else’s dog? (Woof! Think: Rover).
I prove my point. It’s easier than you may think to pick up a few extra dollars here and there. You just need to dedicate a little time and energy to get it started. Ultimately, those extra bucks could jumpstart your emergency fund or pay down a credit card faster. Score!
2. Find a Financial Mentor
If you’re interested in seeing a financial advisor, but aren’t sure where to start looking or don’t feel like it’s the right time yet, finding a financial mentor may be the perfect first step.
Like most mentors, a financial mentor is someone who has walked the path before you, achieved success with managing their own finances, and can help illuminate your way. This person could be a parent, coworker, friend, teacher, pastor — really anyone who you admire for their practical, disciplined, and knowledgeable approach to money. The purpose of this mentorship is simply to establish a relationship with someone who can provide constructive advice, hold you accountable to your financial goals, and even recommend a financial advisor who’s a good fit for you. Ideally, your financial mentor will be someone who you know, trust, and feel comfortable discussing finances with — and who isn’t afraid to call you out on your BS and give you some tough love when needed.
BUT, remember: a financial mentor is not a replacement for a financial advisor. While it may be tempting to imitate every financial decision your mentor has ever made in hopes of achieving the same success, your mentor’s approach may not be suitable for your unique circumstances. Take all advice given as a mere suggestion and make sure to run it past a financial professional first. Your mentor cannot be held liable for a poor investment suggestion or financial strategy that went sideways. (Sorry ’bout your luck).
3. Face the Fear of Money Talk
Asking a coworker how much money they make? GASP! I would never. Pestering my parents to purchase life insurance, long-term care, or write a will? No way. Too uncomfortable. Touching the topic of student loan debt on a first date? WOAH. Now that is just too far!
As a society, we have become afraid of talking about money, and all of this secrecy is ultimately hurting our finances. Why?
Consider this. You just received a job offer in a brand new city. YASSSS! After your initial excitement settles, you realize that #1, you have no idea what a reasonable job offer may be for this position and #2, you have no idea what a reasonable apartment costs in this new city. Thankfully, you have tools like Glass Door and Apartments.com to assist with these decisions. However, can you imagine how much more straightforward it would be to simply ask someone in that position what they are being paid or ask someone in the city how much they are paying for their apartment? For whatever reason, money has become a taboo topic that most Americans feel uncomfortable discussing. It’s time to change that — for everyone’s benefit.
Here’s a New Year’s challenge to spark up these conversations at least once in 2019. (But remember, these are still sensitive conversation topics for some, so please use tact. And if you’re going to ask the question, be willing to answer it yourself):
- Ask a coworker how much they’re making. (Just in case you asked yourself, “But, is that even legal??” Yes, it is.)
- Ask your boss if there are opportunities for promotion and set up a plan to get you there.
- Ask a friend how much they are paying for their apartment.
- Ask your parents if they have life insurance, long-term care, and have written a will. (P.S. These are hugely important topics that no one ever talks about until it’s too late. Don’t be that person).
- Ask your significant other how much personal debt they have (credit cards, student loans, car loan, etc).
- Ask your kids if they have any questions about money, (such as how much you make, how much it costs to buy a car or a house, how much a college education costs, etc). Talking openly and honestly with your kids about money could be the single most influential way to improve the financial habits of the next generation.
- For the ULTIMATE challenge-seekers: Ask a stranger if they feel financially stable. Their response could be eye-opening, and it may spark a life-changing conversation unlike any you’ve experienced before. (Or they may just say, “Nope!” and walk away. Who knows).
4. Make Your Money Do The Work For You
Investing. You’ve heard about it. You know you should probably do it. And you’ve watched The Wolf of Wall Street and The Big Short, so you’re basically an expert.
OK, pump the breaks. You may not be an expert, but you definitely don’t need to be one to start putting your money to work for you.
If you have a retirement account such as a 401(k), 403(b), or IRA, you’re probably participating in the stock market already through the mutual funds inside these accounts. In other words, you’re halfway to being the next Warren Buffett. (Just kidding. But dream big, kids).
So, how do you start investing when you’ve only got a few dollars to spare and your current investment knowledge is limited to binge-watching Shark Tank?
The most old-school, yet time-tested method is to begin working with a financial advisor who is a Registered Representative with FINRA. (How do you know if an individual is registered with FINRA? Check here). This professional can evaluate your current financial situation, assess your risk tolerance, and pair you with suitable investments that both align with your goals and your personal values. Fortunately, we will be speaking with one of these fantastic professionals on our February Face the Fear Podcast episode! Make sure you’re subscribed so you don’t miss it.
An alternative is investing through robo-advisors and investment apps. While you’re missing out on the face-to-face interaction and personal relationship built with a financial advisor, these online tools can be a beneficial and inexpensive option for beginners who don’t have billions of dollars to invest (yet).
As per usual, here’s a quick disclaimer. Investing is one method of wealth accumulation that should be accessible to everyone, regardless of net worth or investment experience. However, investing does involve risks along with it’s rewards. So, make sure you are fully aware of these risks and have received all required informational materials (such as a prospectus) PRIOR to chucking all of your pretty pennies into an investment. Also, here is a Beginner’s Guide to Investing published by the SEC (Securities and Exchange Commission — an independent federal agency established to protect investors). You’re welcome.
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Written By: Kaitlyn Duchien (@ktaylor1395)
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