Managing Money & Marriage

Managing money and marriage can be a delicate endeavor. Timing is important. Discussing a major financial decision right before bed may not be a good idea. My spouse and I made a pact to not discuss money on Sunday (God’s day) because we don’t want to set the day off in a negative direction. You also have to have money boundaries that work for the two of you. The two of you may decide on an amount of money (fun money) that you can spend without having to discuss it. Trying to micromanage your spouse’s spending is not going to have a positive outcome in most cases. It’s also important to discuss money goals. What do you both want to accomplish with the money you earn? Have you discussed retirement? Do you have adequate life insurance? If you have children….are you planning for college expenses? Do you have a budget? Which one of you crafts and maintains the budget? Not talking about significant money issues will NOT solve the problem. It’s not just what you say but HOW you say it. If things get too heated it’s OK to call a time out as long as you agree on another specified time to discuss the issue. Remember you are on the same team. Have you merged your two paycheck into 1 checking account? Do the two of you operate from separate accounts? What bills get paid from each account? The two of you may want to have a Money Date. This is an opportunity to discuss money issues specifically. You don’t have to go to a restaurant. ¬†You can have the date on your front porch if you wish.

Money Talk Guidelines:

  • Use a civil tone of voice
  • Discuss one topic at a time
  • Agree to research a topic and bring it back later
  • Don’t play the blame game
  • Take responsibility for poor decisions
  • Be willing to forgive each other for mistakes
  • Be consistent in scheduling money talks (at least once a month)
  • Listen closely to each other
  • Remember that you both are on the same team

Discussing money issues in your marriage can be both challenging and rewarding. It is my hope that suggestions in this post can help guide your money conversations. What talking tips could you add to my list? Feel free to share your tips in the comments.

Investing for Your Child’s College

Practically every parent wants to help their child with college expenses. Of course, the earlier you begin investing the greater risk you can take with investment options. You need to know your time horizon when evaluating your college funding options. Below are some suggestions to consider when planning for your child’s college education.

1) Put Tax Breaks to Work

In a 529 savings plan, your investment grows tax-free and can be withdrawn tax-free as long as the money goes toward tuition or other qualified higher-education costs like books and housing. Not all plans are created equal. You have a broad menu of investment options. Almost every state has a pre-packaged, age-based portfolio that shifts over time from a heavier stock allocation to more bonds and cash. You should also stay in state if your state has a tax benefit. If it’s at or below 5% your state’s plan is a winner. The Utah Educational Savings Plan, administered by Vanguard, has among the lowest fees in the country and gets top marks from both Morningstar and savingforcollege.com. When setting up the account title it in your name. That way, colleges will count the money as a ‘parental asset,’ meaning those dollars will lower your child’s potential financial aid by a maximum of 5.64% a year.

2) Sprint Out of the Gate

As a brand-new parent you should have 3 goals: 1) Start investing immediately; 2) Put aside as much as you can manage; 3) Load up on stocks.

3) Shift Gears for Tweens

Once your kids enter their second decade it’s time to recalibrate. You still need stocks for growth, but you’ll still want to shift at least some money into bonds for stability. If your automated plan’s allocation seems wrong for you, don’t be afraid to tweak it. If you’re in good shape but you’re using an aggressive path, check whether your state’s plan has a more conservative allocation.

4) Ratchet Down Risk
For the final years of high school, your 529 portfolio needs to get far more conservative. By the time your child is 16, you will want to have cut equities (stocks) to 20 to 30%, with your balance moved into bonds and cash.

Once your child is in college, you can move everything to cash and start spending down the balance. It’s important to weigh all your options when funding your child’s college education.

Note: This information was taken from Money magazine, Jan/Feb 2016 issue.