Why? Because trust and communication form the bedrock of healthy relationships. Keeping secrets of any type and size can shatter faith in your partner. It’s especially true of financial decisions—finding out your spouse has been spending money “behind your back” can cause a rift that may be difficult to repair.
To help avoid trouble and misunderstandings, make it a practice to regularly discuss the family finances with your partner. Set a weekly time to grab coffee and review your budget, your goals, and any changes you need to make moving forward.
It may feel awkward at first. You may learn there are surprise expenses that your partner hasn’t shared until now. That’s perfectly normal! Be sure to create an atmosphere of trust and openness that makes your partner feel comfortable sharing. If they reveal a spending secret, don’t lose your temper. Thank them for their honesty and then work towards a solution for the future!
Once you’ve learned how to navigate open and honest financial conversations, apply your new conversation skills to other topics in your relationship. You might just find that your relationship drastically improves!
By now, you’ve probably noticed that there’s a lot that goes into caring for your newest family member. Between the diaper changes, sleepless nights, and feedings, take a few moments to make these critical financial moves. They may bring you the peace of mind and financial security your family needs!
Add your child to your health insurance coverage. Once your child is born, you have between 30 and 60 days to enroll your newborn in your health insurance plan.¹ Fortunately, it’s not a difficult task. Have your child’s birth certificate and social security number handy, and then call your health insurance provider. Share the good news that you’ve had a child and would like to add them to your plan. If your health insurance plan is through work, you’ll need to contact your HR department and go through the same process.
Find the right childcare for your family. Childcare can be pricey, ranging from $9,100 to $9,600 annually.² If both you and your spouse work, you’ll need to find a way to budget in this significant expense.
Review the costs of local daycare centers. Nannies are worth investigating, but can be more expensive than other forms of childcare. Consider asking your stay-at-home friends or family if they can tend to your children while you’re away from home. You might land a sweetheart deal that builds relationships and saves you money!
Protect your family with life insurance. There is no better time to consider life insurance than after the birth of your child. Raising a kid is expensive! Food, education, and clothing can require significant financial resources. The right life insurance policy can protect your family’s financial stability even if you pass away or if you get sick or injured and can no longer earn an income. Now’s the time to provide the financial security that your loved ones may need in the future.
The first few months of a baby’s life are crazy—they depend on you for everything! Just be sure to take some time between caring for their physical and developmental needs to tend to your financial concerns. It’s one of the greatest services you can offer them!
¹ “How do I sign my new baby up for health insurance?,” Nikki Davis, Bernard Benefits, Sept 2, 2020, https://blog.bernardbenefits.com/how-do-i-sign-my-new-baby-up-for-health-insurance
² “Child Care Costs by State 2020,” Procare Solutions, Jun 24, 2020, https://www.procaresoftware.com/child-care-costs-by-state-2020/
“No” is a common answer to that question, often with serious consequences. One study found that financial disagreements were the leading predictor of divorce.¹
And they seem hard to fix. A research paper published on the National Center for Biotechnology Information, U.S. National Library of Medicine website proposes that “compared to non-money issues, marital conflicts about money were more pervasive, problematic, and recurrent, and remained unresolved, despite including more attempts at problem solving.”²
Fortunately, creating financial unity with your partner is possible. Here are some ideas to bridge the gap with your partner and start working with your money as a team.
Know thyself (and thy partner)
What would you do if you stumbled upon $1 million? Your answer will help you discover your financial values. For instance, if you would use your new-found cash to create your dream business, you might be a natural investor.
But here are two bigger questions: Do you know your partner’s financial values? And how do they align with yours?
The only way to answer those questions is to start conversations with your partner about money. Ask them how finances were handled in their home growing up and what they want money to do for them. Then, look for a middle ground and develop a set of goals you can work towards together.
Discover how money works together
Those first awkward conversations might reveal an uncomfortable truth— if either one of you has any clue what you’re doing with your finances! Ignorance about how money works is the farthest thing from bliss in a relationship. Without knowledge, it’s impossible to set realistic goals and achieve them. You’ll both find yourselves wasting money on what makes you happy in the moment and delaying achieving your goals.
But when you discover how money works as a couple, two magical things happen.
First, you get a sense of what you can accomplish as a team. Suddenly, there’s a vision for your future together that you can work towards.
Second, you notice that you’re communicating more. You swap knowledge, insight, hopes and dreams with each other. You talk about your ideal life together and how to achieve it. That alone is a game-changer for any relationship!
Meet with a professional
It’s impossible to overemphasize the importance of working on your relationship and your finances with professionals. Communicating your feelings and having productive conversations isn’t always easy! A professional counselor can give you and your partner the emotional tools you need to transform constant conflict into cooperative problem solving.
Once you have communication squared away, meet with a licensed and certified financial professional. They’ll provide guidance and insights that can help you make decisions with your money. You might be surprised by the level of peace that appears in your relationship once the stress of your finances is alleviated!
While these steps appear easy on paper, in practice they might push you outside your comfort zone. That’s a good thing! Working together as a couple to create financial unity has the potential to grow you as a person and deepen your relationship with your partner. Start having conversations about your financial values and see where your path leads you!
¹ “This common behavior is the No. 1 predictor of whether you’ll get divorced,” Catey Hill, MarketWatch Jan 10, 2018, https://www.marketwatch.com/story/this-common-behavior-is-the-no-1-predictor-of-whether-youll-get-divorced-2018-01-10#:~:text=Smart%20money%20says%20this%20argument%20could%20lead%20to%20divorce.&text=%E2%80%9CFinancial%20disagreements%20did%20predict%20divorce,together%2C%E2%80%9D%20the%20authors%20concluded
² “For Richer, for Poorer: Money as a Topic of Marital Conflict in the Home,” Lauren M. Papp, E. Mark Cummings, and Marcie C. Goeke-Morey, NCBI, Dec 6, 2011, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3230928/
Different spending habits and conflicting money management values are sometimes sources of tension between partners. Finances are the number one cause of arguments within relationships. In fact, it’s one of the most common reasons for divorce.
With bills to pay, emergency expenses, and a child’s college tuition and retirement on the horizon, many couples find their finances are stretched as they seek solutions to cover the cost of everyday life. The following 5 tips may help you and your spouse gain control of your finances.
1. Set Goals
The goal-setting phase allows a couple to talk openly about their financial history, current obligations, and future objectives. Gauging your spouse’s retirement preferences can often be a challenging obstacle before establishing a financial strategy.
2. Identify Risky Spending
Overspending and making frivolous purchases may damage your financial future. Discussing mistakes respectfully on both sides of the relationship can help prevent poor decisions in the future. If an expense proves to be a blunder, own up to the fact and move on.
Review the household “record of accounts” (that is, your budget) and your current financial landscape before adjusting your strategy. This may help protect your family from further problems that might delay the timeframe you want to retire.
3. Pay off Bills
Be fair. If—or when—your spouse admits to overspending, try not to blow up. We live in a consumerist society designed to push our buttons and trick us into spending. Even worse, it’s a pattern that can be difficult to break because it’s a very socially acceptable addiction.
Instead of exploding, ask them open-ended questions about their spending habits. The key here is working towards a compromise in a way that doesn’t villainize your partner but also protects your financial future together.
4. Periodic Review
Due to the dynamics of financial decision-making between spouses, it’s clear that periodic review has a benefit. Changes in income, lifestyle, and family or business obligations can alter a couple’s financial goals for retirement. Try to meet at least once a month (maybe over a cup of coffee) to review your finances and update your budget.
5. Don’t forget to have some fun!
The goal of getting in control of your finances is not to make life miserable. Sure, you might need to cut back on frivolous spending in the present to have more in the future, but that doesn’t mean you can’t enjoy life. Set aside a little each month for a movie night or dinner with friends. You actually might discover that things like budgeting free up cash!
Building a financially sound relationship takes time. It takes a willingness to listen, to compromise, to take responsibility, and to prepare. Sometimes it might take some experience as well. Contact a qualified and licensed financial professional to help you and your loved one come up with a strategy to build your future 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!
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.
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.”
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.
Well, maybe a brand new sports car or free ice cream for life. But even a state-of-the-art fully-decked-out sports car will eventually need routine maintenance, and the taste of mint chocolate chip can get old after a while.
The same kinds of things can happen when you start your own business. There are many details to consider and seemingly endless tasks to keep organized after the initial excitement of being your own boss and keeping your own hours has faded. Circumstances are bound to arise that no one ever prepared you for!
Although this list is not exhaustive, here are 5 things to get you started when creating a business of your own:
1. Startup cost
The startup cost of your business depends heavily on the type of business you want to have. To estimate the startup cost, make a list of anything and everything you’ll need to finance in the first 6 months. Then take each expense and ask:
Once you’ve determined the frequency and necessity of each cost for the first 6 months, add it all together. Then you’ll have a ballpark idea of what your startup costs might be.
(Hint: Don’t forget to add a line item for those unplanned, miscellaneous expenses!)
“Find a need, and fill it” is general advice for starting a successful business. But if the need is apparent, how many other businesses will be going after the same space to fill? And how do you create a business that can compete? After all, keeping your doors open and your business frequented is priority #1.
The simplest and most effective solution? Be great at what you do. Take the time to learn your business and the need you’re trying to fill – inside and out. Take a step back and think like a customer. Try to imagine how your competitors are failing at meeting customers’ needs. What can you do to solve those issues? Overcoming these hurdles can’t guarantee that your doors will stay open, but your knowledge, talent, and work ethic can set you apart from competitors from the start. This is what builds life-long relationships with customers – the kind of customers that will follow you wherever your business goes.
(Hint: The cost of your product or service should not be the main differentiator from your competition.)
3. Customer acquisition
The key to acquiring customers goes back to the need you’re trying to fill by running your business. If the demand for your product is high, customer acquisition may be easier. And there are always methods to bring in more. First and foremost, be aware of your brand and what your business offers. This will make identifying your target audience more accurate. Then market to them with a varied strategy on multiple fronts: content, email, and social media; search engine optimization; effective copywriting; and the use of analytics.
(Hint: The amount of money you spend on marketing – e.g., Google & Facebook ads – is not as important as who you are targeting.)
4. Building product inventory
This step points directly back to your startup cost. At the beginning, do as much research as you can, then stock your literal (or virtual) shelves with a bit of everything feasible you think your target audience may want or need. Track which products (or services) customers are gravitating towards – what items in your inventory disappear the most quickly? What services in your repertoire are the most requested? After a few weeks or months you’ll have real data to analyse. Then always keep the bestsellers on hand, followed closely by seasonal offerings. And don’t forget to consider making a couple of out-of-the-ordinary offerings available, just in case. Don’t underestimate the power of trying new things from time to time; you never know what could turn into a success!
(Hint: Try to let go of what your favorite items or services might be, if customers are not biting.)
5. Compliance with legal standards
Depending on what type of business you’re in, there may be standards and regulations that you must adhere to. For example, hiring employees falls under the jurisdiction of the Department of Labor and Federal Employment Laws. There are also State Labor Laws to consider.
(Hint: Be absolutely sure to do your research on the legal matters that can arise when beginning your own business. Not many judges are very accepting of “But, Your Honor, I didn’t know that was illegal!”)
Starting your own business is not an impossible task, especially when you’re prepared. And what makes preparing yourself even easier is becoming your own boss with an established company like WealthWave.
The need for financial professionals exists – everyone needs to know how money works, and many people need help in pursuing financial independence. WealthWave works with well-known and respected companies to provide a broad range of products for our customers. We take pride in equipping families with products that meet their financial needs.
Anytime you’re ready, I’d be happy to share my experience with you – as well as many other things to consider – when becoming an associate with WealthWave.
Nearly every choice you make precludes something else that might have been.
Opportunity cost exists in everything from relationships to finances to career choices, but here we’ll focus on that last one. Over a lifetime, the cost of career decisions can be massive.
For opportunity costs that can be measured, usually in dollars, there’s even a math equation.
What I sacrifice / What I gain = Opportunity cost[i]
Let’s say you have two career choices. One is to work as a mechanic at $50 per hour and the other is to work as a karate instructor at $20 per hour.
Opportunity A / Opportunity B = Opportunity cost
Here it is with numbers: $50 / $20 = $2.50
To translate that, for every $1 you earn as a karate instructor, you could have earned $2.50 as a mechanic. The ratio remains the same whether it’s for one hour worked or 1,000 hours worked because it’s based on earnings per hour.
Adding a time element
We can only work a certain number of hours in a week and we can only work for a certain number of years in a lifetime. Adding time into the discussion doesn’t change the math relationship between the opportunities but it does recognize real-world constraints. Sometimes these limits are by choice. You could be both a full-time mechanic and a full-time karate instructor, but most people don’t want to work 80 hours per week. Something has to give, and that’s where considering opportunity cost comes in.
If you only want to work 40 hours in a week, you’ll have to choose one career over the other or split your time between the two. But even in splitting your time, there is an opportunity cost. Think about it like this: Every hour spent in a lower paying job costs money if you had an opportunity to earn more doing something else.
The bigger picture
In our example using the mechanic vs. the karate instructor, the difference in annual income is over $60,000 per year ($104,000 minus $41,600). Over a 40-year working career, the difference in earnings is nearly $2.5 million, and it all happened one hour at a time.
Your career choice shouldn’t just be about money – you should do something you enjoy and that gives you satisfaction. There may be several other considerations as well – like opportunity to travel, the kind of people you work with, and the greater contribution you can make to the world. However, if there are two choices that meet all your criteria but one pays a bit more, just do the math!
In fact, money matters are the leading cause of arguments in modern relationships.* The age-old adage that love trumps wealth 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!)
Huckabee, Tyler. “Why Do People In Relationships Fight About Money So Much?” Relevant, 1.3.2018, https://bit.ly/2xiflG9.
It seems like that candy bar in the check-out lane has doubled in price without doubling in size. Unlike the value of stocks, real estate, or similar assets, candy doesn’t appreciate in value. What has happened is that your money has depreciated in value. Inflation has a sneaky way of eating away our money over time, forcing us to either find a way to earn more – or to get by with less. Even for the youngest of Generation Z, now in their early teens, consumer prices have increased about 30% since they were born.[i]
In 2018, the average new car costs $35,285 – up $703 since the previous year, or about 2%.[ii] While a $703 increase in a single year might seem high, the inflation rate (as a percentage) is lower than for many other items. And some other items may not have gone up as much as you would expect. For example, in 1913, a gallon of milk cost about 36 cents. One hundred years later in 2013, the average cost was about $3.53.[iii] But if milk had followed the average rate of inflation, the price for a gallon would be nearly $10.00 by now. Supply, demand, and more efficient production and distribution all contribute to a lower price than expected with the milk example. The U.S. government uses what is called a Consumer Price Index (CPI) to measure inflation, which unfortunately does not include food and fuel – both essentials and daily expenses for households – making the true rate of inflation more difficult to determine.
Inflation is due to several reasons, all with complex relationships to each other. At the heart of the matter is money supply. If there is more money in circulation, prices go up. Under the current monetary system, which utilizes a Central Bank to govern monetary policy, inflation rates have been as low as about 1.3% annually in 1964 to 13.5% in 1980.[iv] That means something that cost $10 in 1979 cost $11.35 just a year later. That may not seem like a big increase on $10, but if you’re like most people, your pay probably doesn’t go up 13.5% in a year for doing the same work!
How does inflation affect my savings strategy? It’s a good idea to always keep the current rate of inflation in the back of your mind. As of August, 2018, it was about 2.7%.[v] Interest rates paid by banks and CDs are usually lower than the inflation rate, which might mean you’ll lose money if you leave most of it in these types of accounts. Saving, of course, is essential – but try to find accounts for your cash that work a bit harder to outrun inflation.
[iv] & [v] https://www.usinflationcalculator.com/inflation/historical-inflation-rates/