What to Do
Short-Term Changes For Long-Term Results
Most married couples take a “divide and conquer” approach to household chores. One spouse might handle the weekly shopping, and the other might handle yardwork and maintenance. One spouse might drive the kids to school in the morning, and the other might handle pickup and extracurricular activities. But household spending and budgeting is one of those responsibilities best tackled together. Money issues are one of the biggest sources of marital tension and a leading factor in divorces. Here are five ways you and your spouse can make sure you agree on your household spending, avoid surprises, and maximize the Return on Life™ your money provides. Many couples assume their attitudes about money are aligned. Then one day, the roof needs an emergency repair that taps a savings account, or someone walks in the door with a splurge purchase (or worse yet, hides it)! Stressful situations are not the ideal time for a couple to discover significant differences in spending habits. Sit down with your spouse and make a thorough review of your finances and monthly budget. Find compromises that will allow you to save for the future while still enjoying your present. 2. UNDERSTAND THE TOTAL HOUSEHOLD CASH FLOW. misunderstandings and arguments about where the money goes every month. Both spouses should understand how much they spend every month and how the bills get paid. If you’re the one who’s usually in charge of bills, take an hour to walk your spouse through the process you use to keep it organized. Show him or her which bills are paid electronically, which are paid by check, the monthly amounts and due dates, etc. This won’t just help both of you understand the monthly cash flow, it will ensure that both of you can handle managing the household finances in the event of an emergency. 1. HAVE AN OPEN AND HONEST DISCUSSION. In many households, one spouse handles all the bill payments. This can lead to
3. BE TRANSPARENT ABOUT ALL ASSETS AND LIABILITIES.
being in that position, especially if you’re saying “no” to your children. Eventually, you or your spouse will resent being this person. You should both understand the household’s monthly cash flow and agree on how your money is — and isn’t — spent. 5. GET HELP Mint.com is one of many apps and web services that help households set and maintain a budget. If you’re a small-business owner, Intuit offers a line of bookkeeping and tax-prep solutions to fit any need. Automating select bill payments and regular contributions to retirement and savings accounts can also help to clarify your monthly budgeting picture. Finally, if there’s a spending gap between you and your spouse that seems impossible to bridge, we can be an excellent resource. It’s important to us that we understand where clients’ attitudes about money come from, how they’ve developed, and how they can diverge between couples. Facilitating this dialogue is key to making sure both people have the best life possible with the money they have … and we can help do that for you.
Newly married couples might still have banking or credit accounts from their single days. The other spouse might not find out about these accounts until a credit card is maxed out or a checking account is overdrawn. Again, the less stressful your reason for talking to your spouse about money, the more positive the outcome will be. Financial secrets tend to come out at the worst time, which compounds the stress, hurt feelings, and strain on your budget. Your spouse should be a cosigner and beneficiary on all your accounts and vice versa. If one of those accounts carries a large liability, get out in front of the problem and talk about how to start paying it down. Discuss the ramifications of combining any large individual assets with a tax professional or your financial advisor. 4. AGREE ON A BUDGET. If one spouse is responsible for budgeting and bill paying, that person often becomes “the one who has to say no.” No eating out this week. No weekend trip to the waterpark. No new cell phones. No new clothes. No fun! Nobody likes
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