Happy Valentine’s Day! I have to admit this is one holiday that I could never get behind because of two reasons. First, were men "had to" buy women gifts or cards to prove their affection to one another, most of the time in front of others. Second, I worked in the restaurant industry for 10 years. If that's not explanation enough I would recommend you pick up a shift at your local steakhouse on this day.
While I may be scorned from the celebration I know that it’s a good reminder to keep you relationship top of mind. And if you are a financial advisor, like me, it’s the perfect time to remind you that the number one stress in relationships is MONEY.
If you are in a deeply committed relationship there is nothing more sexy than to renew your commitment to your mutual financial success. Here are some ideas to say “I do” to this month.
• Vow to protect yourselves from emergencies
During the government shutdown early this year we learned that 40% of Americans don’t have enough money set aside to handle even a $400 emergency. Whether you determine you want an amount equal to six months’ or 12 months’ worth of living expenses, vow to set aside an emergency fund in liquid, readily-accessible accounts so that you have adequate cash on hand should you need it.
• Vow to make saving and retirement planning a priority for you both
Even though retirement accounts are held separately, it’s important to have a shared vision about your retirement together. Be sure to meet with your retirement planner or financial advisor to discuss your future goals and time horizon. Other financial goals should also be prioritized so that you’re both on the same page, like saving up for the kids’ college expenses or the daughters’ weddings.
• Vow to protect your family finances by shifting risk
Along the same lines as an emergency fund, work with a financial advisor to determine how much risk you both face from other potentially life-altering events. What would happen if one of you suddenly became unable to work or function due to a disability? What if you required nursing care? What if one of you suddenly passed away?
Insurance companies offer policies designed to shift many of life’s unexpected financial risks away from your family. Be sure to compare policies offered by multiple highly-rated insurance companies to help ensure you get the best coverage for your premium dollar.
• Vow not to keep secrets about money and keep the communication flowing
Hopefully you’ve been honest from the beginning of your relationship about your level of debt, how you handle sticking to a budget, or whether or not you have a low credit score. Understanding each other’s financial position and money habits is the first part of being able to take control of your finances together in order to achieve mutual goals as a couple.
And remember that it’s important that both of you understands your overall combined financial picture, even if one of you pays the bills or the other takes the lead role in investing. Don’t delegate this, make it a point to stay in the loop with financial decisions. Even if you have separate bank accounts to handle the day-to-day finances, you both need to understand where you’re at and where you’re headed when it comes to your financial future as a couple, especially your plan for retirement.
Even if it doesn’t seem exactly romantic, talking about money can make your relationship a more perfect union for the long-term. Aiming “for richer” rather than “for poorer” together can strengthen your matrimonial bonds.
If your relationship is maturing and you are looking for a mediator to help guide you with couples financial counseling and advising. Text me (425) 610-9226 Book an appointment.
CNN, “40% of Americans can't cover a $400 emergency expense.” https://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html (accessed February 11, 2019).
Forbes, “6 Financial Vows Couples Should Take To Heart.” https://www.forbes.com/sites/judithward/2019/01/23/6-financial-vows-couples-should-take-to-heart/?ss=personalfinance#1a8149385241 (accessed February 11, 2019).