Tag Archives: Marriage and finances

Managing Money as a Couple

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It’s February, and Valentine’s Day is right around the corner. While this might be the month to celebrate love, it could also be a good time to go over your finances with your Valentine. When you marry or share a household with someone, your life changes—and your approach to managing your money may change as well. The good news is it’s usually not so difficult.

At some point, you will have to ask yourselves some money questions—questions that pertain not only to your shared finances but also to your individual finances. Waiting too long to ask (or answer) those questions might have some consequences. It’s also good habit (even if you’ve been together for a long time) to review these questions annually as well.

How do you propose setting priorities? One of your first priorities should be simply setting aside money that may help you build an emergency fund. But there are other questions to ask. Should you open joint accounts? How should you title assets that are owned by both of you?

How much will you spend and save? Budgeting can help you arrive at your answer. A simple budget, an elaborate budget, or any attempt at a budget can prove more informative than you realize. A thorough, line-item budget may seem a little over the top, but what you learn from it may be truly eye-opening.

How often will you check up on your financial progress? When finances affect two people rather than one, statements can become more important. Checking in on these details once a month (or at least once a quarter) may keep you both informed, so that neither one of you have misconceptions about household finances or assets. Arguments can be avoided when money misunderstandings are resolved through check-ups.

What degree of independence do you want to maintain? Do you want to keep some money separate? Some spouses need individual financial “space” of their own. There is nothing wrong with this approach.

Can you be businesslike about your finances? Spouses who are inattentive or nonchalant about financial matters may encounter more financial trouble than they anticipate. Watch where your money goes, and think about ways to pay yourself first. Set shared short-term, medium-term, and long-term objectives.

Communication is key to all this. Watching your progress together may well have benefits beyond the financial, so a regular conversation should be the goal.

If you still have questions, or you’d like more information on how to best manage your finances as a couple – we’re here to help. You can call or email the financial professionals in the First Financial Investment & Retirement Center at 732-312-1534, mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

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This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Setting Financial Goals as a Couple

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Valentine’s Day is next week, and what better time of year than to sit down with your partner and talk about your financial goals as a couple and make plans for your monetary future?

Talk

The first step in achieving your financial goals together as a couple, is to talk to each other. Communication is one of the most significant components of any relationship, and discussing your finances together is super important. As you’re both talking, you’ll each want to mention the goals you both have for the two of you, your individual financial goals, and be sure to jot everything down or save them on a note in your phone or on the computer.

As you’re discussing, be sure you’re each respectful of what the other is saying. If you don’t understand something, ask questions – but you never want to make your partner feel bad about one of their goals or that it’ll never happen. Your financial situation as a couple is something you’ll both need to communicate about, see what’s realistic and what isn’t, and find ways to achieve your goals together.

Prioritize

Once your financial goals have been agreed upon and written down, it’s time to prioritize the order of how and when to achieve them. An important component of prioritizing your goals together is to decide which ones are must-haves, and which ones are nice-to-haves. For example, if your family is growing and you no longer have the space to live in a condo – buying a single family home would be a must-have goal. An annual cruise vacation is a nice-to-have. You’ll both also want to do the same with your individual goals.

Another part of prioritizing is how long it might take to reach your goals. Short-term goals are typically ones that can be completed in under a year (for instance, buying new appliances for your kitchen). Long-term goals typically take anywhere from 3-5 years or more to accomplish (boosting your retirement savings or renovating your home). Once you’ve prioritized your list, you’ll want to choose the first goal to achieve. There isn’t a right or wrong way to do this, just as long as you both are on the same wavelength.

Plan

Now it’s time to plan out how you’ll achieve your financial goals together. The best way to do this is to be specific about what the goal is, measure the goal and track your progress, decide on a way to attain your goal, be realistic about if it’s possible to achieve this goal, and set a time for when you’d like to have the goal completed by. Once your goals are planned out, you can officially begin to put money aside and start working on achieving them as a couple.

Check in on your progress

Once your plan is set and you’ve begun working on your financial goals, it’s important to keep track of your progress and potentially reconfigure your plan if you need to. You’ll want to do this at least once a month if possible. For example, maybe you both have realized you didn’t save as much money during a certain month and didn’t meet your monthly savings goal – but when you went back and reviewed your expenses, you saw that you went out to dinner or bought takeout several times a week. For the next month, try to plan to eat at home instead of dining out. You can meal prep together and plan all your meals in advance so you don’t get tempted to order out if you both come home too tired to cook one night. It’s okay to make mistakes and readjust your budget together – the most important thing is that you are both monitoring your spending, communicating, and changing your financial habits for the better moving forward.

As always, the team at First Financial can help you better manage your money and reach your financial goals. Call us at 732.312.1500 or stop by any of our local branches.

Want to see more articles like this? Subscribe to First Financial’s monthly newsletter for financial resources and advice.

Article Source: CUInsight.com

 

Tips for Discussing Finances in Your Relationship

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You’ve probably never heard your partner say, “let’s talk spreadsheets.” However, all couples have to broach the money conversation at some point in their relationship. Talking about finances with your partner is never an easy conversation, but it should be done as frequently as possible – especially if you’re living together, getting married, or starting a family.

According to a recent study, couples who talk about money regularly are happier in their relationships than those who discuss it less frequently. Overall, money plays a big role in relationship problems – which can lead to breakups or divorce if not managed the right way.

The good news is that talking about money can make your relationship stronger and even help you get closer to your partner.

When to start talking about finances with your partner

There’s no cut-and-dry answer for when to tackle the money conversation, but you should at least have brought it up before the relationship turns serious. Before you move in together – you’ll need to understand what your partner earns, how much they can contribute to the household, and what their other expenses look like. Before you get married, you’ll want to know about your partner’s debt and what their credit score looks like. This knowledge can help build equity in relationships. Plus, their financial status will impact you should you both wish to obtain a loan for a bigger purchase down the road.

Start small

Don’t start your first date by asking, “how much do you make?” Instead, trickle in financial topics by asking them about their goals in life. This could be anything from, “What’s your dream retirement age?” to “Where do you see yourself living in the next ten years?”

Experts recommend asking “what if” questions to not only learn about their financial priorities but also their values. Some icebreakers could include, “If you won the lottery, what would you do with the money?” and “If you had to choose between a high-paying job with high stress or a low-paying job that you love, what would you pick?”

The more you talk about finances in this way, the easier it will be to talk about their financial situation over time.

Be understanding

Everyone comes from different backgrounds, values, and financial limitations. If your partner’s parents didn’t teach them effective money management skills, it doesn’t mean they can’t learn. Talking money makes people vulnerable, so it’s important to listen and be sympathetic too. Responding with anger will cause your partner to not feel safe having this type of conversation with you, leading to a lack of trust and transparency.

You also don’t want to just bring the conversation up out of nowhere, give your partner some advanced notice. A great example of this is simply saying, “I’m trying to get better about budgeting and want to talk about finances more regularly. Could we plan to talk about it this weekend?” Having a conversation goal in mind is even better. If you’re planning a romantic trip together, also plan a budgeting conversation so you can save up for your getaway.

Be consistent

It should be a regular part of your routine to talk about finances. When paying your bills, plan to do a monthly financial check-in with your partner. The goal isn’t to micromanage your partner’s spending habits, but rather to see where you both land on your goals and where you can improve. Over time it will become a regular part of your relationship, and will help make you both feel like you’re on the same team.

If you need some help with budgeting and financial literacy, look no further than the team at First Financial. We can give you recommendations and advice based on your financial situation. Contact us to get started, or stop by your local branch to speak with a representative today!

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