Search: life-insurance

How to Get Your Spouse On Your Financial Team

This article was written by Neal Frankle in People. 2 comments.

This is a guest article by Neal Frankle. Neal is a Certified Financial Planner and blogs at Wealth Pilgrim. Neal writes about taking action steps to improve clients’ financial situations and finding balance at the same time.

I’ve often wondered if the posts we write about personal finance are getting into the hands of the people who need them most.

You already know the importance of tracking your budget, having enough life insurance and having your financial house in order.

But what if your spouse doesn’t understand these things? Worse, what if he doesn’t even want to hear about it? What do you do then?

Do you want to know the single greatest indicator of a couple’s future financial success? It’s when both partners being on the same page.

When they aren’t, it’s like a time bomb waiting to explode. It doesn’t matter how much money you have or earn. If you don’t generally agree on the importance of saving, investing, budgeting, insurance, etc., you’re facing an uphill climb.

Here are 5 steps you can take to get your spouse on your team:

1. Be clear about your motives.

Let me clarify this by way of example: I’m a CFP with a degree in accounting. I love taking care of the money and my wife is only too happy to assign that task to me.

But I also come from a home where neither of my parents did any long-term planning. They didn’t follow a budget. They didn’t save and they didn’t plan. When they both died while I was in high-school, my life became a nightmare.

I refuse to subject my kids to that same risk. That’s why I want my wife to be able to step in and take over should something take me out.

My motive is fear, fear of what would happen if the unthinkable took place. I’ve discussed this with my wife and she gets it. Before I told her what about my fears, she just thought I was being silly since I had the professional and educational background to take care of the finances. Now she realizes it’s not that simple.

Your motives might be very different than mine. You might want your spouse to get on track because he’s derailing your finances. He might be spending too much or he might not be tracking his spending. What are your fears around that? Are you afraid you’ll never get out of debt? Are you worried about retiring? What is your motive?

Be honest with yourself and your partner. If you have a solid relationship, your spouse will be more willing to get out of his comfort zone and take action. Your honesty will also be an invitation to your spouse to be honest about his own financial motives and behavior. That’s the kind of conversation you’re looking for.

2. Discuss what money means to you.

When you think about money, why is it important to you? What are your dreams? How does money facilitate those dreams? How does your behavior get you closer to or further away from those things you want most in life?

Share your thoughts and get your spouse to share his thoughts too.

3. Fess up.

Admit how your own financial behavior gets in your way sometimes. Admit to your own mistakes. Are you too controlling? Are you living in fear?

When you open up, encourage your spouse to open up too. By calling yourself out first, it should make him feel more comfortable to do the same.

4. Get together.

Work out an action plan with a time table. Break down your goals to bite size, manageable mini-goals. If you need $3000 to pay off the credit card and you want to get it paid off in 10 months, work out a plan to save $300 each month. Write down how you, as a team, are going to get this done.

5. Be accountable.

Of all the steps I’ve listed, having an accountability partner is the most important. Go to someone you both trust and share your plan with that person. Make a commitment to provide progress reports to your accountability partner every month.

What makes this step so powerful is that you take off your hat as the bad guy. Hopefully, you both make commitments to your accountability partner and you each have responsibilities. You’re not the one your spouse has to answer to. This takes a lot of the pressure off and it’s also a powerful motivator to get things done.

If you and your spouse are not on the same page financially, you’re going to struggle in areas and waste energy. I know that it’s not easy to deal with a spouse that doesn’t see things the way you do. But if your spouse agrees to go through this process (and be completely honest each step of the way) I know you’ll be much further down the road to financial success.

Have you used any of these steps? Did it help? What was the eventual outcome?

{ 2 comments }

Are You a Maximizer or a Satisficer?

This article was written by Aaron Pinkston in People. 4 comments.

This is a guest article by Aaron Pinkston, founder of Clarifinancial. He wasn’t satisfied with the ways people had to get life insurance quotes, so he created something better.

Have you ever noticed you can relax about decisions you made while others around you are still running around frantically? On the other hand, you probably have certain decision obsessions that seem to grab all your energy and focus.

Some people are maximizers and feel compelled to find the single best possible solution available (or find a new one). Other people are satisficers who are comfortable with decisions they make, as long as they are mostly confident the decision they make is reasonably good.

Many people seem to believe being a satisficer is better because they are happier and can make decisions more efficiently than maximizers. However, I believe there is a lot of value in being a maximizer. Like most things, you can probably have both attributes.

I know that I am a maximizer in some parts of my life but a satisficer in others. In fact, I can be more specific than that — I am only a maximizer in areas that matter to me.

Matrimonial mania

People love to give examples of weddings, so I’ll follow suit. When it came to my wedding, I was a satisficer. Both my wife and I thought it was a silly question when people asked what our “colors” were. I had no idea what that question even meant!

Secretly, I think my mom took it too far when she planted the garden with flowers in the color we were forced to choose. The only reason I let her do that was because she plants annuals, which are plants that die after just one year. She even considered the blooming cycles of different plants to maximize the color on our wedding date. But to her, this was an important decision that would help make the whole design more harmonious.

Come wedding day, we moved it inside because of the rain and everybody was happy.

Am I saying my wedding was unimportant to me? Sort of. But only because I maximized my decision for a life partner. Others seem to take the opposite approach.

Happiness and innovation

I agree with the research that shows satisficers are usually happier. I know I’m consistently happy when I don’t have to worry about something, and this includes many things in my life, like what I wear.

But I love a challenge. Sometimes, being exceptionally great just isn’t enough. It’s not until I have found the very best possible answer that I can experience true and lasting satisfaction. Satisficers might typically be happier, but if it weren’t for maximizers, the quality of our lives would stagnate.

Look at all the innovation around you. Better yet, since you’re reading this on a computer, stop to think about all the innovation at your finger tips. I’d be willing to bet that your computer and the network of computers that enable you to read these words wouldn’t rock so hard if folks were okay with the answer they already had. In fact, as good as it is, it’s not good enough for some. What will they create next?

Those people are maximizers in part of their life but are probably satisficers in other areas. We wouldn’t have knives if a chipped rock was good enough. Knives come in handy. I have a few in my kitchen. But I don’t need them to be the best.

Think about it. Are you a maximizer in some areas of your life and a satisficer in other areas? When are you content when others continue searching and when do you keep looking for better answers when others have moved on?

{ 4 comments }

Are You Expecting an Inheritance?

This article was written by Flexo in Family and Life. 20 comments.

According to a 2004 survey, 21 percent of people born in 1964 or later expect to inherit money from family some time in the future. Many expecting recipients may be in for a surprise, however. A recent article by Ron Lieber at the New York Times identifies eight reasons why inheritances, perhaps not those in rich families but in well-off middle class families, may be diminishing over the next generation or two.

1. People who make it to 65 will live a lot longer. More time alive requires more expenses, and in many cases this is significant. The cost of care for elderly seems to grow exponentially with increasing age.

Try to guess how long your relatives will live using this life expectancy calculator.

2. Social Security and Medicare will probably change. It’s a safe bet that the goverment will be cutting back on the services offered by these programs as more people require the services and fewer people are paying the associated taxes. Therefore, more expenses will need to be covered by your relatives’ nest eggs, otherwise known as your potential inheritance.

3. Fewer people have pensions, so they’re more wedded to the markets. With a nest egg invested in the market for long term growth, the funds are subject to the swings of the stock market. A down market at the wrong time could reduce your inheritance by ten percent. Say goodbye to your summer home.

Also, a down market during any time during your relatives’ retirement means that more of their principal will go towards paying their own expenses.

4. Out-of-pocket health care costs for retirees may soon hit seven figures a couple. A 55-year-old couple with above average medical costs can be expected to need more than $1,000,000 in capital just to finance health case costs for the rest of their lives.

5. Divorced individuals may pass on less money. Leaving an inheritance to children is often a joint endeavor. Without a connection between husband and wife, one might not be willing to pass wealth onto kids seen as the other’s.

The divorce rate in the United States has been declining recently, but the rate of co-habitation (opposed to marriage) is increasing. The supposed colatile nature of co-habitation may have the same financial impact to heirs as divorce does.

6. It’s getting easier to drain a home’s equity. The reverse mortgage is an increasingly popular way to turn one of your largest assets in retirement into an income stream. A cash-strapped retirees can find himself selling his house back to a bank, and when the house is sold, the proceeds go to the bank rather than to the family.

7. Life insurance may not offer much help. Many people have the opportunity to sell life insurance policies to investors. When someone does so, the benefits normally received by the insured become the property of the investor, leaving less to pass to the next generation.

8. The transfer of wealth will increasingly happen while the older generations are still alive. Rom points out that grandparents are increasingly helping grandchildren with education expenses, as the cost of a college degree continues to skyrocket. Whether these types of transfers are intended to reduce estate tax liability or simply help their relatives in the best means possible, it reduces the size of the estate that would theoretically be available for inheritance.

All of the above trends considered, I think it’s safer for most of us to assume there is no inheritance on the way. With this in mind, without the thought of being bailed out in the future, it can force some of us to be more mindful about spending today.

8 Reasons You Should Not Expect an Inheritance, Ron Lieber, New York Times, June 21, 2008.

{ 20 comments }

Weekly Blog Roundup II: Middle Class, Investing in Yourself, and Jai Rodriguez

This article was written by Flexo in Link Sharing. Add a comment.

In case you missed them, I’ve picked out a few excellent articles from the MoneyBlogNetwork that were published last week, as well as a few from other blogs. I’ve now split my weekly roundup into two posts, spaced within a few days of each other, because there are many articles I’d like to highlight. Please read these when you get a chance.

How Do You Define Middle Class? Free Money Finance offers MSNBC’s definition, but how do you define this particular socio-economic term? For me, the term doesn’t rest with absolute income limits; an annual $100,000 means two different things in New York City and Kentwood, Michigan.

Eight Ways to Invest in Yourself. Mighty Bargain Hunter presents some suggestions for creating an Income Plan B, including blogging and learning a second language. Perhaps a combination of the two would be sehr intéressant, sí?

Busy Days for NCN. No Credit Needed outlines his new will, life insurance policy, and new van. It sounds like someone is getting something done.

Priviledged Information. Tired but happy is on the board of directors of her son’s school, and now has access to extremely personal information belonging to the families of the school’s students. The data could be dangerous in the wrong hands. In a previous job, I had access to the salary and bonus information of several hundred of my company’s employees, and it was tempting to use that information for negotiation purposes. Rather, I ignored it, as it was depressing to look at.

Ten Money Questions for Jai Rodriguez. I saw Jai in Rent many years ago and met him in person when I made it to the second round in auditions for the second season of Queer Eye for the Straight Guy. (It would have been cool to have my home redecorated.) Here, Queercents asks Jai about appreciating the arts on a budget, good dates in New York, and money’s role in relationships.

{ 0 comments }

This Week in the Archives: Sleeping, Paris Hilton, and Apartment Hunting

by Flexo

My friend Nickel is celebrating the second anniversary of his blog, FiveCentNickel. Did you know that Consumerism Commentary has been around since July 2003? I’m looking forward to my fourth anniversary. In the mean time, here are some articles from this week in some of those prior years. From May 1-7, 2006: * May 2: ... Continue reading this article…

0 comments Read the full article →

Financial Documents For Young Families

by Flexo

Have you recently welcomed your first child into your family? If so, it may be time to get some of your financial documents in order. These are some things you may not have considered before having a baby. This video from SmartMoney TV quickly runs down the basics: which documents are necessary and why. 1. ... Continue reading this article…

3 comments Read the full article →

Best of 2006, January Through June

by Flexo

At the end of last year, I put together a list of the “Best of 2005,” just a collection of posts here at Consumerism Commentary that might stand out. There was no rhyme or reason to my selection. Needless to say, I’m very lenient with my definition of “best.” We’re more than halfway through 2006, ... Continue reading this article…

0 comments Read the full article →