Ask Susan!
Dear Susan: My Fiancée wants to combine financials.
Am I being a bad partner if
I don’t say “Yes?”
Whether you prefer to watch and listen or read her advice, Susan has some advice to keep your marraige and finances harmonious.
Thanks for clicking the link! I hope to use this space to share with you insights I’ve learned over my decades as a Financial Expert and through the business I created over 24 years ago – Stiles Financial Services. So it here goes!
To Julie and everyone else who wish to improve their financial fitness, here is why it’s so important to your overall physical and emotional health. The stress of debt, the uncertainty of unexpected expenses, the anxiety around meeting future goals like retirement and college funding and the guilt of not saving enough can weigh heavily on your emotional well-being which can directly affect your personal health. But I’ve found that when taking small, intentional steps toward financial health can have a profound impact on every area of your life. This is a very simple way to start—and will help you get started and feeling better about your “financial health.”
- Set Clear Financial Goals
Start by asking yourself, “What do I want my money to do for me?” Set goals that are simple: build an emergency fund, save for retirement, purchase a home, plan how to pay for college for your children, and even that dream vacation. Writing down your goals starts the commitment and gives you clarity and motivation. If you don’t have clear goals, it’s easy to drift. Decide what matters most to you and create a roadmap to get there. Periodically revisit your goals and tweak them. Acknowledge and celebrate your achievements.
- Save First, Not Last
One of the best pieces of advice I’ve given, especially to young adults, is to pay yourself first. Every month, set aside a portion of your income into a savings account before paying any bills. And, if your employer offers a retirement plan, contribute to that plan as soon as you are eligible. Over time increase your saving rate until you can max out in your employer plan. It may be hard at first, but over time you will get used to the routine of saving. Over time, you will see your savings grow and that will give you a sense of accomplishment and pride. Don’t put off saving because you haven’t paid off your debt. You can do both at the same time. But you need to understand what the source of your debt is. If it’s due to bad habits, then you need to work hard to change or you will be saddled with debt for the rest of your life.
- Start Investing—Even If It’s Small
Investing in the stock market may intimidate some people. But you don’t need to be an expert to start. I will often suggest starting with an index fund. Your employer retirement plan will offer investment options for you to select from and often your employer may have an adviser that can help you as well. Utilize these services if they are available. The key is consistency and time, not perfection. And don’t try to predict the market. The biggest mistake investors make is selling and buying into the markets when driven by emotional impulses.
- Tackle Taxes Head-On
It is important that as a tax paying citizen you understand the basics of how our tax system in America works as it relates to your personal financial situation. Your goal is to not unnecessarily overpay taxes by ignoring tax saving strategies. If your financial situation is complicated, then it would behoove you to align with a tax advisor. If you are a self-learner, there are many ways to learn about personal taxes. The online tax tools are very good and easy to use.
- Manage Risks Wisely
Unexpected expenses—like medical bills or car repairs—can throw anyone off balance. Prioritize having insurance that fits your needs and an emergency fund to cover at least three months or more of expenses. Knowing that you are prepared for the unexpected should alleviate some anxiety over potential surprises.
- Think About Legacy
Although it’s hard to think about what happens after you’re gone, it’s important that you do so, so that you don’t leave your loved ones in limbo. First think about the what if scenario if something were to happen to you. The best gift you can leave your loved ones is an organized and well-thought-out estate plan. Work with a lawyer to create an estate plan that may include a will, trust(s), healthcare directive, power of attorney and charitable gifting strategies. Coordinating guidance and advice from a financial advisor and private wealth manager will make the process more efficient and clearer to understand.
- Make It a Wellness Journey
Financial health isn’t just about numbers; it’s about how you feel. Setting goals, making plans, and celebrating small wins can reduce stress and boost your confidence. It is important that you understand your spending habits and where your money goes every month. Know that you picked up habits and attitudes about money from your family and exposure growing up. Keep the good habits and try to change the bad habits.
My Advice to You
If you’re feeling overwhelmed by your finances, start small. You don’t have to do everything at once. Pick one area—saving, investing, paying off debt and tracking your spending—and work on it. Each step forward builds momentum. Remember, financial wellness is a journey, not a destination.
When you’ve saved enough to engage with a Financial Advisor, they’ll create a roadmap for you to continue saving for your retirement or other concerns. They can help you put your money to work in harder working ways. And knowing that you have got a plan in place will give you peace of mind and more control. And that will help you live and sleep better.
Here’s to your health—financial and otherwise!
See you next month with answers to another exciting new question.
– Susan