Love and Money: Families who discuss finances openly are more likely to stay together

By Julie Cole, CFP, FLMI Annuity Product Manager

moneyDuring 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.

A New Year, A New Financial You Revisited

clip_image001By Peggy Moore

On January 4, 2013 I highlighted Dave Ramsey’s Baby Steps from his book The Total Money Makeover.  At that time, my New Year’s resolution was to start a total money makeover by setting a budget, paying down my debt, and saving for my future.

It’s been 14 weeks since I wrote the article A New Year, A New Financial You.  While it hasn’t been an extensive amount of time to accomplish my goals, I’ve been able to save cash for my emergency fund, pay off two credit cards and am close to paying off my third credit card (within days). With a total of $2,000.00 paid toward debt and saved in my emergency fund, you may be wondering how I managed to do so much in just 14 short weeks.  It’s simple: I decided what was most important to me, set my goals, and am powering through!

I’ve had to make sacrifices to get where I am today.  I am now shopping at Goodwill more frequently than at the mall and borrowing books from the library instead of buying them.  I no longer shop on a whim, I shop with a list.  I also shop the grocery store ads and plan my meals around what’s on sale.  I spend cash when shopping: when the cash is gone, my shopping is done.  I still go out to eat with my friends once a week but choose smaller meal portions or a la carte items to keep the cost down.  I also used my tax refund toward my goals instead of spending it.  Everything that I can do to save money means paying off my debts faster and getting my emergency fund fully funded.

While all of those sacrifices have aided me in establishing my emergency fund and paying down my debt, the biggest change I’ve made has been working extra hours at my part time job.  By working a few extra hours each week, I’ve been rewarded with paying off some of my debts faster than I ever thought possible.

With a few months come and gone in 2013, it feels good to have accomplished some of my New Year’s resolutions.  Have you kept your New Year’s resolutions?  Or have they fallen by the wayside now that we are 14 weeks into the New Year?  I plan to continue working on my total money makeover until I have financial stability and I encourage you to do the same.  As Dave Ramsey says, “It is going to rain; you need an umbrella.”  Now I’ve got an umbrella.  Do you?

For even more information on Dave Ramsey, his books, and more, visit: www.daveramsey.com or www.mytotalmoneymakeover.com.

If you have a success story about your total money makeover, please share it in the comments section below!  We’d love to hear them!