By Julie Cole, CFP, FLMI Annuity Product Manager
During uncertain economic times, levels of ﬁnancial stress are sure to be even higher. Families ﬁnd themselves having to readjust their expenditures and their expectations as a result of the economic downturn. Relationships become strained under the pressures of plunging stock prices, falling home values, and rising unemployment. Times are tough enough without money squabbles adding to the tension. Ginita Wall, CFP® and founder of the San Diego, California based ﬁnancial planning advisory ﬁrm Plan for Wealth, suggests making money talks a regular part of every relationship. Don’t leave discussions about ﬁnances to chance. “Schedule meetings to talk about money,” says Wall. “Discuss your ﬁnancial situation, dreams, and goals, and generate ideas to improve your future. Then do something fun, like watching a movie, afterwards.”
When talking about ﬁnances don’t sling the blame. Talk about your ﬁnancial circumstances and accept where you are. Explore what you need to do now and re-examine the ways you spend. If you’ve always operated in a certain way, maybe that
way has to change. Most of us are due for a change. Discussions that start out with “If only we had….” are not healthy discussions. Don’t second-guess past decisions. Statements like, “If only we hadn’t taken that vacation and put all the expenses on
our credit card,” or “If we had paid down our credit card bills with our tax refund instead of buying a new computer,” should be considered oﬀ limits.
Your family discussions should focus on actions that you can commit to right away and without too much disruption. Drastic changes are diﬃcult to make and may lead to resentment. If you declare “We will no longer eat out!” and you don’t participate in planning and preparing the family meals, this can lead to some disputes. Consider making modest changes that you can easily keep. If your family is very devoted to eating out three times a week, then consider cutting back to eating out just two times a week and make that one home meal preparation part of family time. This can save you up to $120 per month
and help the family spend more time together.
Many couples already know they are spending too much—whether it’s dining out, buying clothes, collecting golf accessories or jewelry. Cut back in those areas. Keep track of
everything you spend for at least one month. This will give you a good idea of where you can cut back. In other words, deal in reality, not unreality. People often don’t know where their money goes. When they see how much they’ve been spending, they say things like, “ I had no idea we spent that much on eating out.” Remember you’re not sacriﬁcing your lifestyle forever; you’re just tightening your belt for a while.
Involve children in ﬁnding ways to save money, as long as their roles are appropriate to their age. If you have to economize, explain the situation and ask the child to think of areas in which to economize, too. Otherwise, they might feel like they are being punished. Kids can learn some money management skills at the same time.
A recent decade-long study of San Francisco families found that their happiness depended more on how open they were in discussing ﬁnancial issues than on their level of income. The worst thing couples can do is to continue to ﬁght about ﬁnances and decide to divorce. That is sure to cause more ﬁnancial distress than anything. Work together toward a solution.
To learn more about Financial Matters or about wfla, visit www.wflains.org.