Easy Ways to Organize Money Before Year End

Aug 23, 2024

Easy Ways to Organize Money Before Year End

Taking the First Step Towads Organizing Your Money

Trying to organize money can feel like scrambling eggs, flipping pancakes, and trying not to burn bacon at once.

And for working moms, professional women, and divorced women, the financial circus can seem even more intense – trust me, I know.

Fear not, because it’s not too late to turn your financial chaos into organized bliss.

The first step is often the hardest, and it’s the part we usually want to skip.

Here’s how you can confidently level up your money management game and consistently achieve financial goals regardless of how much money you have.

5-7 min read: Looking for the audio version of this blog post – Sign up for the FIIRM Hero Newsletter Community to HEAR what this post is all about when you don’t have time to read it.

What is the First Step to Organized Finances?

The best way to organize your money is the way that works best for you.

But I can’t think of any reason why the following steps wouldn’t be helpful as outlined in this first section. These first few actions are helpful for single, married, and post-divorce women.

Set Clear Priorities

Decide which area of your finances needs the most attention. What’s important? What is more urgent?

Only try to tackle a few things at a time if you are working on your financial health alone (no financial team, financial bff, or romantic partner). Think about the different ways in which your finances are affected the most.

Do unexpected expenses throw you completely off track? Do you need to focus on paying off debt, saving for a goal, controlling your spending habits, or just taking control of your finances?

Create a Plan

Outline the financial decisions you need to make to achieve your priorities. Be specific and set deadlines to keep yourself accountable.

Document the plan, which includes your budget, by writing it down or using an app to track your goals (see below for more guidance). You don’t need to map out the plan for the year; start with the next 90 days.

Take Action

There is no such thing as a perfect moment, so please don’t wait for the ideal moment to start.

Commit to taking action because small actions lead to significant results over time. Which leads me to the next step…

How to Set Financial Goals You Can Actually Achieve?

The best way to set your financial goals is in alignment with your upcoming milestones and transitions.

Setting financial goals is like plotting a road trip’s route— you might get lost without a map. Think about your intentions for this year – what do you want to achieve? What has gotten in the way of you making those things happen?

Break Down Big Goals

Significant financial goals can be intimidating, and there’s a high likelihood that you won’t reach them if they are too lofty.

Breaking them into smaller, manageable, realistic steps is a good idea.

For example, if you want to save $5,000 for a down payment in 6 months, it might sound ok to write down that goal.

However, suppose your financial life won’t let you be great because can’t put $833.33 into your savings account over the next 6 months. Because you rarely have $833 left over at the end of the month.

In that case, your goal needs to be adjusted. That may mean saving for longer or reducing the down payment amount. This will make your savings goals realistic and, most importantly, achievable.

Track Your Progress

When it comes to personal finances, seeing your savings grow or your credit score improve can be incredibly motivating. Monitoring your progress with a spreadsheet or a budgeting app is a great way to do this.

You can also set up alerts for your checking account activity, credit cards, bill payments, due dates, etc. You name it, there is probably an alert for it.

Alerts often help you avoid or reduce late fees and spend a little less time reviewing bank or credit card statements. Almost every financial institution allows you to set up an alert on your financial accounts.

These alerts can help you avoid unnecessary fees and provide peace of mind that your accounts are being monitored.

Stay Flexible

Life happens, and sometimes you need to adjust your goals. Whether it’s saving for a family vacation or building an emergency fund, clear goals will keep you focused.

Suppose your son or daughter is graduating from high school, and it’s time to buy yourself a new car.

In that case, your family vacation may not be as long or as luxurious as you would like it to be, depending on how your cash flow is set up. Flexibility allows you to adapt without getting discouraged.

If you know you have good habits, then little hiccups won’t mess you up in the long term.

Plan for Fun

Personal finance isn’t all about deprivation. Set aside funds for fun activities to keep life enjoyable and see the fruits of your labor.

What’s the Best Way to Simplify Your Financial Life?

Tracking bill payments, important documents, investment accounts, and financial records can suck, but it can make it easier to organize your money.

Simplifying your financial life can reduce stress and make money management more effortless. This is super important for your post-divorce life as your world has likely been turned upside down, and you need things to be more accessible.

You may need more good days than bad ones, and simplifying your financial life can help.

Consolidate Accounts

If you have multiple checking or savings accounts, consider consolidating them if you are not using them. Also, consider reducing the number of financial institutions where you have accounts. Fewer accounts mean less to keep track of.

Automate Your Accounts

Set up automatic payments for bills. This ensures you’re never late and saves you the hassle of remembering due dates. If your cash flow is inconsistent, you can still use your bank’s online bill payment system to set up the payments manually. This gives you more control over how you pay bills.

Set Up Direct Deposit

This way, you’re saving before you touch the money.

Automate your savings so that a reasonable portion of your paycheck is automatically deposited into your savings account.

By setting up automatic transfers, you can grow your savings over time.

Reasonable is the trick here, but you decide if 5% or 25% makes sense for your long-term goals. If that’s not feasible, you can set up automatic transfers directly from your checking account to your savings account for an easy way to save consistently.

Go Digital

Use an online banking mobile app and budgeting app to manage your finances. Digital tools can provide real-time insights and make tracking easier. Apps like Acorns, Qapital, and Chime round up your purchases to help you reach your savings or investing goals. It’s an easy way to save without even noticing.

How to Organize Your Financial Documents & Your Credit Cards?

An organized money system, including keeping your financial documents organized, can save you time and reduce stress. Credit card management can be tricky. When credit cards are used wisely, they can be a great financial tool. Here are some simple ways to organize your financial documents:

Create a Filing System

A good system can be digital, physical, or a combination of the two. Most of us receive some statements online as well as paper statements. You may still have a physical filing cabinet or leverage digital tools like Dropbox. As a Certified Divorce Financial Analyst (CDFA®), I know firsthand that setting up your filing system and keeping everything in its proper place are important steps if you are planning to divorce. Guess what, though? It’s equally important when you are planning to get married. If you take the time to do this, you’ll also be a dream client for a financial advisor.

Go Digital

Whenever possible, opt for digital statements and receipts. Digital documents are easier to organize, take up less space, and reduce financial clutter.

Some credit card companies allow you to have a virtual credit card number. This number is usually different from the card number on your physical card and provides a better sense of security.

Capital One allows you to set up a unique number for each vendor, which makes it easier to stay organized about who has your card number on file.

Regularly Review and Purge

Periodically review your documents and discard anything you no longer need. Start by checking your credit report for mistakes.

Dispute any inaccuracies you find. Keeping only essential documents reduces clutter and makes it easier to find what you need. Bank statements, ATM, and credit card receipts can be discarded once reconciled unless required for tax purposes. Shred expired credit cards!

Get rid of your expired debit card. But it’s best to hold onto documents that are difficult to replace. Some of those are listed below:

Adoption papers & birth certificates
Citizenship Documents
Death Certificates
Divorce Decree & Marital Settlement Agreement
Estate Documents
Marriage License
Military Discharge Papers

One last helpful note to support your financial success. There is no need to carry all of your credit cards in your wallet. While it may require more planning on your point, limit the cards you carry in your wallet. Carry the cards you’ll need that day or that week and place the rest in a secure spot.

Discovering the Best Way Forward

We are all unique. What works for one person might not work for another. Here are two simple things that can help.

Experiment & Seek Advice: Build your financial team with the right advisors to get advice. You’re not expected to know everything and an outside perspective can help with complex decisions.
Stay Committed: Financial organization is a continuous process. Stay committed to your plan, take a closer look at your money goals regularly, and make adjustments as needed.

Wrapping Up Your Journey to Organizing Your Money

This post was all about the best ways for women to organize their money. Organizing your finances doesn’t have to be overwhelming. You can achieve financial clarity and peace of mind by:

Setting clear financial goals
Leveraging tools like budgeting apps and automation
Remember, the key to success is taking that first step and continuously making progress.

Ready to take your financial organization to the next level? Need some assistance? The FIIRM Approach helps female breadwinners protect their financial security and improve how you manage your financial life.

Let’s connect to see how the FIIRM Approach can provide you with personalized strategies and guidance that work for your needs. Sign up for the FIIRM Hero newsletter community and get access to free information.

Start your financial transformation today and make 2024 your best financial year yet!

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Nikki Tucker

Founder & Managing Director

Nikki is an experienced financial services professional, a Certified Divorce Financial Analyst ®, and the primary divorce financial strategist for The FIIRM Approach. She helps female breadwinners prepare for divorce to avoid common financial mistakes and confidently maintain their financial security post-divorce. She uses proven strategies within the FIIRM Approach methodology so her clients can manage their money, debt, and credit and be connected to the right resources for the next phase of life. TAKE ACTION & LEARN about the tools that can help make your pre and post-divorce easier. Grab your FREE Divorce Support Pack.

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How a Great Marriage and a Good Divorce are Connected

Aug 13, 2024

How a Great Marriage and a Good Divorce are Connected

How can a Marriage make a Great Divorce?

Do you remember what age you first started thinking about marriage?

Even if you don’t, I am 99% positive that when you were thinking about how great your marriage could be, you weren’t also thinking about how to have a good divorce. How is that even a thing?

In this post you will learn, how can a marriage make a great divorce?

Well, let’s explore it. Shall we?

Let’s kick things off with truths we can all agree on.

What’s the Good News About Money and Marriage

Whether on social media, TV, or in movies, marriage is often described as a union of hearts.

We hear about fairy-tale wedding ceremonies and happily-ever-after lives and witness strong, loving families being built every day.

All marriages (an unhappy marriage & amazing ones) have two crucial sides- the transactional and the relational sides. These two sides ultimately lead us to the “Marriage and Money Paradox.”

Unfortunately, we often don’t give enough consideration to this paradox and how it can redefine “forever.”

This paradox is where love meets financial statements, and you may have to do some hard work you feel unprepared for. In a heterosexual marriage and same-sex marriages, the concept of merging finances upon tying the knot isn’t just traditional—it’s expected.

What’s also expected, and in my opinion, is part of the good news about marriage, is that it comes with multiple financial perks. Most of us probably know this, but if you are unaware, allow me to lay out three major financial perks that come with the institution of marriage in the United States.

Tax Breaks

According to the IRS.gov website, in 2024, the standard deduction for married couples filing jointly for tax year 2024 is $29,200, while the standard deduction for single taxpayers and married couples filing separately is $14,600.

In layperson’s terms, this means that you are financially incentivized to (1) marry and (2) combine your finances on your annual tax returns because it can reduce your taxable income (the amount of your income that is subject to taxes) and lower your tax bills. Most couples consider this benefit a good thing.

Insurance benefits

While not a requirement for small businesses (with less than 50 employees), companies allow their employees to cover their spouses under health insurance programs. Combining coverage under one program instead of covering both spouses individually can reduce the amount of money spent on health insurance.

In addition to health insurance, property insurance carriers view married people as less risky, so lower premiums are typically charged to married people compared to single persons.

Building wealth together

From a financial perspective, this is the best thing about a marital union. Outside of love, family, and romance, we all know it takes money to survive & thrive. So logically, if we consider those two essential things mentioned above, a reduction in taxes and the ability to save money on insurance, marriage presents an excellent opportunity to build.

At the same time, this may sound “ick” because acknowledging the business side of marriage makes you uncomfortable. I’m not diminishing the value of marriage to money; I’m just recognizing that marriage involves math. These financial perks can feel like hitting it big at the slots in a Las Vegas casino—but with higher stakes.

Unfortunately, too many couples, though eagerly welcoming these financial benefits, don’t consider the financial consequences if the marriage dissolves.

So, let’s unpack some of the truths here as well, especially since they aren’t talked about enough.

How Planning a Great Marriage Can Make an Unplanned Divorce Better

In a world where financial security and peace of mind are essential, navigating the choppy waters of money management within a good marriage can feel like a high-stakes game of Monopoly. But a failing marriage can feel like riding a scary rollercoaster at large theme parks. Of course, most of us don’t want to think about the divorce process, but most fail to realize that planning for a great marriage may result in a good, although possibly unplanned, divorce.

First, you have to be intentionally transparent. Conversations about short-term and longer-term decisions must include your goals and visions for your family life. Planning for your financial future isn’t just wise—it’s critical. I can promise you that some compromise is involved, and you don’t want the first time you have a very serious conversation about money to be after you get married.

Here are five steps to ensure you have more financial harmony in marriage.

Action Steps for a Financially Engaged Marriage

1. Transparent Communication

I’m not referring to “talking for the sake of talking.” I mean talking so openly and regularly that you feel naked and exposed. When it comes to money, we have to get comfortable with being uncomfortable—as long as it’s a safe space. Transparent conversations can prevent misunderstandings, allow for real personal growth, and improve your decision-making process.

As you schedule date nights to keep the romance alive, why not set aside time for “money dates”? These sessions can be as casual as discussing budgets over brunch or as formal as meeting with an agenda. The key is to make financial conversations intentional and a regular part of your relationship so you understand where your partner stands when it comes to financial goals, spending habits, saving money, taking on debt, and more. Transparency is key for these dates.

2. Set Up a Joint Budget

Create a budget that accounts for shared expenses and individual spending. One of the best things about modern technology is that there’s no shortage of tools to help you. You decide what tool works best for you. Tools like Empower (formerly Personal Capital), Monarch, YNAB (You Need a Budget), and many others can be lifesavers. It doesn’t matter what tool you pick. It only matters that you USE it.

3. Separate but Equal Accounts

Gone are the days when a joint bank account was the only option. Nowadays, many couples are opting for a “yours, mine, and ours” approach. This strategy allows each person to maintain a sense of financial independence while still contributing to shared expenses.

4. Create a trusted support network

It is crucial to have a solid financial team to help you understand the implications and benefits of marriage for your unique situation. Your team can also keep you abreast of changes in laws and financial regulations that could affect your marital financial plan. Additionally, having the right financial professional and getting sound legal advice is the ultimate power move. It’s the ultimate embrace of vulnerability to strengthen your financial future together.

5. Consider a Prenup

Prenups are not about a lack of trust; they are actually all about trust because you are sharing critical and vulnerable information with your soon-to-be spouse BEFORE you get married. I didn’t make this step last because it’s unimportant; it’s last because it deserves its own section.

So, let’s have an honest discussion about prenups.

The Unspoken Key to a More Secure Future Together

First things first, what is a prenup? A prenup is a legal document between two people planning to marry that outlines how you will handle money during your marriage and then divides it in the event of a divorce. Sounds serious, right? But it’s not all doom and gloom. Creating a prenup can be an empowering process that strengthens your relationship from the get-go. It’s there to protect both parties and ensure a fair distribution of assets if things go south, but it can also be the document that helps you structure your marriage from a financial perspective.

A prenuptial agreement is like a financial seatbelt. But let’s be honest—we aren’t wearing a seatbelt because we WANT to or expect to crash. A desire to get a prenup means you’re being strategically cautious.

Alongside the romance and shared dreams explored in a new relationship, the mere mention of a prenup might feel like a romance killer if you are heading toward marriage. But trust me, addressing sensitive money topics head-on can be a game-changer for your marital relationship.

If prenups are so good, why aren’t they more popular?

I’m glad you asked.

Taboo – For years, prenuptial agreements were seen as taboo. But times are changing. According to a study by the American Academy of Matrimonial Lawyers, 62% of lawyers cited an increase in prenuptial agreements. However, they still don’t get the credit they deserve.

Confidentiality – Some prenuptial agreements include confidentiality clauses that prevent the couple from discussing the terms of the document with others, so there’s not much they can share.

Impact on Marriage Rates – While I think it’s rare, some couples decide not to proceed with their marriage after going through the prenuptial process. Younger generations are waiting longer to marry, and there may be some fears that the already declining marriage rate will continue. However, my rebuttal is twofold. (1) If a couple decides not to get married because they don’t feel financially compatible, then that’s not a bad thing (2) What if an increase in prenups could be the thing that helps to continue to lower the divorce rate because couples improve their chance of staying married. Talking about finances openly and honestly with your partner can help you understand each other’s financial habits, goals, and potential red flags. This transparency can build a solid foundation of trust and respect, making your marriage even stronger.

Before you enter a serious relationship, clearly understand your financial goals and boundaries. Knowing what you’re bringing to the table and what you expect from a partner allows you to set the stage for financial equality before the marriage license is signed.

The other reason prenups are not popular is because most people genuinely don’t understand them. Can we bust the myths associated with prenups?

prenup agreement with heart icons

Prenups don’t jinx your marriage.

Reality – Statistically speaking, getting a prenup does not tip the scale towards your marriage ending in divorce, so the idea that it jinxes a marriage is based more on feelings than facts. Even though they are seen as a plan for failure, the bottom line is they do just the opposite. In reality, they’re just another form of financial planning with the benefit of potentially keeping you out of court should you divorce.
Reality – Pre-nuptial agreements often get a bad rap as unromantic or distrustful. What’s more romantic than showing your partner that you’re thinking about your future together in the most practical way possible?

Prenups are not just about divorce

Reality – You can use a prenup as a financial guideline to help manage finances in your marriage. The U.S. has a divorce rate of about 45%, and although it is not the highest divorce rate in the world, it’s still significant. What are some of the top issues that lead to divorce? Money, but of course! So, if you’re aiming for a low conflict marriage or even a low conflict divorce, a prenup is a tool that can help with that goal. You get to make very informed decisions about money and property during the prenup process.
Reality—Marriage is not just a romantic union; it’s a significant financial partnership. By understanding the incentives and potential consequences, you’re establishing an informed foundation for your future together. Remember, approaching marriage with both hearts and heads aligned is the best strategy for sustained happiness and financial stability.

Prenups aren’t only for rich people

Reality – Prenups are for anyone who wants to ensure that their financial future is secure. It doesn’t matter if you have significant wealth or come from different worlds. A prenup can also address future earnings and assets even if you don’t have substantial assets today.
Reality – Some couples with significant assets choose one spouse to remain a stay-at-home parent/spouse, leaving that partner in a vulnerable position without the proper protections. A prenup is a way for the stay-at-home spouse to better secure their financial future during & after marriage. A prenup can protect both partners from unforeseen debts and financial obligations. It can outline who is responsible for which debts, protecting you from your partner’s financial liabilities. However, any disposition that would leave one spouse in poverty and on public assistance is generally not enforceable, so those one-sided prenups you hear about are pretty rare.

Regardless of the number of divorces or marriages you’ve had, a prenuptial agreement can save a lot of heartache and money down the road. It can be the unspoken key to a secure future together.

Speaking of multiple marriages, let’s talk about that as well.

First Marriages vs. Second Marriages

Second marriages often come with more life experience and, consequently, more financial wisdom. However, they also bring complexities like blending families and managing existing financial obligations. In second marriages, it’s even more crucial to protect assets and clarify financial responsibilities. Doing this on the front end will result in less time negotiating, improving your emotional well-being.

Considerations for second marriages:

Blended Finances – How will you manage finances with children from previous relationships? What are the expectations for merging households, and who will be responsible for them? Prenups safeguard individual assets and family inheritances intended to stay separate property.

Estate Planning – Ensure your estate planning reflects your current wishes and protects all loved ones. Ensure that your beneficiary information and any estate documentation are up-to-date, and remove references to your former spouse (as your settlement agreement allows).

What’s the benefit of Financial Transparency in Marriage

Financial transparency is about laying all your cards on the table, from student loans to secret shopping sprees. The goal? To build a foundation of trust and eliminate any “money surprises” that could throw your relationship off-balance. The last thing that a spouse wants is to be surprised by some crazy financial secrets that can turn your great marriage into a bad marriage.

Financial transparency allows for clarity, protection, and peace of mind, allowing you to focus on building a happy, healthy relationship.

If you want to help make your money conversations less awkward, starting with transparency early in the relationship is essential. Similar to the divorce process, the prenup process requires you to be financially transparent.

The Overlooked Financial Consequences of Divorce

Divorce isn’t just emotionally taxing; it’s financially draining. When you say “I do,” you’re also saying “I do” to your partner’s financial situation—debts, assets, the works. Furthermore, you’re saying I do to your state’s laws on assets and liability splits unless you have a prenup that says otherwise.

Here are some financial land mines to watch out for during a divorce:

Division of Assets: Splitting assets isn’t as simple as slicing a cake. You could end up with much less than you think you are entitled to.

Alimony and Child Support: These short term/long-term obligations can seriously impact your financial stability. Note: A prenup cannot outline child support obligations.

Legal Fees: Divorces are expensive, for most people. The average cost of a divorce in the U.S. ranges from $15,000 to $30,000, according to LegalZoom. Since all states offer no fault divorce, these numbers have very little to do with who’s at fault.

Lifestyle Changes: Adjusting to a single income after years of dual-income living can shock the system.

Wouldn’t you rather have conversations about these topics while you’re still in love and have your partner’s best interest at heart versus when it’s been decided that your marriage is over or that you can’t stand being in the room with them?

Time for Action

Marriage and money don’t have to be at odds. By redefining what marriage means when it comes to your finances, you can build a loving and financially stable relationship.

While finances and prenuptial agreements might not be sexy topics, they’re certainly one of the most important. Taking the time to transparently plan and discuss your financial future can make your marriage stronger and more resilient. And if the unexpected happens, having a prenup in place can make life smoother and a divorce less contentious.

Hopefully, I have reinforced that marriage is both a beautiful partnership and a financial contract. And now you better understand how a a great marriage and a good divorce are connected. By understanding the financial implications and preparing for any eventuality, you can ensure that your marriage, or even your divorce, is financially savvy.

Ready to take control of your financial future and break the taboo of money and marriage? Join FIIRM Heros like yourself. Sign up for the FIIRM Hero Newsletter Community to connect with us.

Your future self will thank you.

Screw Love. Are you financially compatible in your relationship? Important Money Topics to Discuss Before Marriage

Jul 15, 2018

Screw Love. Are you financially compatible in your relationship? Important Money Topics to Discuss Before Marriage

Updated on October 15, 2020

If you’re planning to jump the broom, it goes without saying that you love each other.

Well… unless it’s an indecent proposal or you guys have an arrangement.

“No judgment from me – Do you!”

As a lover of romance and any solid Rom-Com, I am not discounting the importance of love in relationships and marriage.

Hot, steamy, undying, can’t-nobody-tell-me-nothing love, can be fun, exhilarating and just downright sexy.

However, love itself won’t solve or prevent all problems, particularly when it comes to money and relationships.

Let’s keep it real, fighting about money sucks.

Before you go deeper as a couple, grab this FREE guide to help your on your financial journey. Use the tools and resources to help your money make more sense and stay on track to reach your financial goals

Sometimes your plans, expectations, and behaviors with money are misaligned with your partner’s plans, expectations and behaviors.

Hence, the shouting matches over finances.

If you are already married or damn-near-married, there are ways to stop fighting over money.

Occasionally, those fights are necessary because your approach and habits are SO different from your partners.

Sometimes, the relationship can’t be salvaged because of those differences.

Even I have a few relationship deal killers of my own:

Stealing money from my purse or bank account
Getting credit in my name for use without my permission
Not paying any bills

All those offenses require little conversation, just the packing of his damn clothes and stepping to the left…to the left.

What are some of your hard line, “I ain’t playing with you” financial boundaries?

Maybe you already know the answers to some fundamental, but important questions like:

Is your bae/boo/ future spouse a spender or saver?
Does your partner have deep-rooted issues with money?
Can you trust your significant other to handle all YOUR money, if needed?
Are they controlling when it comes to money and how you spend it or do they plan to hand their paycheck over to you?

Hopefully, this post helps you go a bit deeper into you and your partner’s financial life or even consider what your hard “clothes packing” financial boundaries are.

The questions/topics below are designed to prompt you to have deeper, more thorough conversations with your partner about money and the role it will play in your relationship.

It’ll definitely serve its purpose if it saves you and your partner from future money fights!

The topics below can help you discover how aligned your financial philosophies are.

So, what do you need to do next?

Review the categories and determine what questions you’ve already covered in your relationship.

You will also be able to determine what categories you want to delve into with your mate.

I know, I know…you may not want to bring some of these things up.

Believe me, I understand that money conversations can be emotional and uncomfortable.

But let’s be honest, break-ups over money are worse – much more emotional and frustrating.

Ignorance is not bliss.

Sometimes it’s simply expensive.

Love and logic don’t need to be mutually exclusive.

Think about the role money has played in your past relationships or even the relationships of people you know. (We both know some ugly stories about people and their money fights)

It’s important to note that you are NOT recreating the Spanish Inquisition. The goal is not to prove who’s right or wrong. The goal is not to be hard-nosed and inflexible.

You should be using the topics below as a brainstorming tool to first, help you recognize if you are aware of your own position on these topics and second, determine if you and your partner are well aligned when it comes to money in a marriage.

There will be/should be areas where you are willing to compromise. However, it’s absolutely okay if & when you have areas that you don’t see eye-to-eye that you are less willing or unwilling to compromise on.

It is safe to have financial boundaries.

Real talk moment again – You may already be seeing red flags which is not uncommon in relationships, but what do they REALLY mean? How much will they impact you in the future? Are they deal killers that you are just trying to ignore?

Are you afraid to discuss certain topics because the hard truth may be that you just are not financially compatible and want to delay the impending breakup? (See my ignorance comment above).

How many of your past breakups should have happened before they actually did?

We’ve already settled that you love each other. Now, are you willing to do the work to determine if you and your partner are financially compatible before you make a lifelong loving commitment?

Friendly reminder: Make note of the areas where you are unsure of your own position and take the time to consider it before your conversation or be upfront with your partner that you’re still trying to figure it out.

Money Management

Separate or Joint finances

- You have various options to consider but the primary options are typically:
  - 1 primary joint checking account where both paychecks are deposited.
  - 1 primary joint checking or savings account where a set amount is transferred from each of you.
  - Joint everything.
  - Separate everything.
- Ask your partner which option they prefer and what their experiences have been with the different options listed above.

Established emergency fund

- How much money is important to have saved based on expenses, income, and level of job security. Here are a few areas to cover:
  - When was the last time you & your partner were unemployed and for how long?
  - When was your partner’s last promotion?
  - If your partner has been in the same role for a number of years, there are a number of things to consider:

- - - (1) If they have maintained certifications or continuing education credits to keep their skills up-to-date.
    - (2) If they are at the top of their payscale
    - (3) The marketability of their skillset outside of their current employer (4) If below average performance is an issue in their current role (thus threatening their job stability)
  - How much are their monthly expenses?
  - How easy is it for others to get a job in their field?
  - How many sources of income do they have?
  - How much access to credit or other income sources do they have?

Bankruptcy

- What are their general sentiments around bankruptcy?
  - Has it ever been filed? How many times? How long before it’s cleared?
- What kind of bankruptcy did they file in the past? (Chapter 7 or 13)
- Would they want to file bankruptcy again, if needed?

Credit/Debt Health

- What is your partner’s Credit Score?
- How many credit cards do they have? Do they available credit on the cards?
- Do other people have access to their credit lines?
- Are they a joint signer or co-borrower for someone else’s debt?
- How does your partner feel about debt? (“striving to be debt free” versus “everyone dies with debt”)
- Do they have collections or past due student loans?
- Have they ever had a foreclosure or short sale and the circumstances around it?

Taxes

- When was their most recent year of tax filing?
- Would they prefer to file Joint or Separate returns?
- Do they understand how child support or back taxes can impact tax filings as a married couple?
- Would they be offended if you filed for injured spouse relief? (injured spouse relief may allow you to obtain a tax refund (or a portion of the refund) when you partner’s tax liabilities would otherwise offset the refund)
- Do they typically owe or receive refunds?
- How much in do they owe in back taxes?

Living Arrangements

Cohabitation

- How do you and your partner feel about living together before marriage?
- Is your partner willing to move into your place or are there expectations to get a “new place” together?
- Who should handle the management of bills and how will housework be divided?
- How do they see expenses being divided (who pays what?) Do they believe in traditional domestic gender roles or are they open to anything?
- Are they open to the idea of hiring help? (lawn service, housekeeper or cleaner, handyman, etc)
- Would they be willing to sign a cohabitation agreement?
- Who should pay for the furniture and moving expenses?

Renting versus Own

- How does your partner feel about owning property?
- How many properties has your partner owned in the past?
- How many properties does your partner currently own?
- Is your partner comfortable with only one name being on the lease?
- Has your partner had past evictions?
- Would they prefer a longer or shorter mortgage (15 years versus 20 or 30 years)?
- Have they ever had a foreclosure or short sale and the circumstances around it (yes, it’s a repeat from above because it’s important)

Family Support

- Is your partner supportive or opposed to parents or other family members moving in?
- Is your partner supportive or opposed to financially supporting parents or other family members?
- How much is a reasonable amount of family support?

Children

Child Support

- How much is being paid in child support per month?
- Is your partner current or in arrears with child support?
- Are child support payments court ordered or an informal arrangement?
- When was the last time your child support amount was reviewed?
- Will your custody and/or support agreement be affected if we move in together?
- Are they willing to opt out of receiving child support after you marry? (not recommending this, btw, but you/they might want to know)

Financial Support for Adult Children

- What age is too old for an adult child to live at home?
- How much is financial support reasonable to provide to an adult child?
- Should adult children pay bills while living at home?
- What is a reasonable amount of money for an adult child to contribute?

Allowance

- What’s a good age to provide allowance?
- What items should a child be made to pay for with their own money, if any?
- How much is a reasonable amount of allowance to provide to a pre-teen versus a teenager?

Children’s Education

- Do they have a college fund or savings establish for your kids (or plans to establish one in the future)
- How does your partner feel about paying tuition for elementary or secondary school?
- How does your partner feel about paying for college?
- Do they want their kids to take out student loans?
- Have they already co-signed for student loans?
- Would your partner prefer they stay on campus or live at home during college?
- Would they rather the child go to an in-state or out-of-state college?
- Are they aware of the difference in cost for (Instate versus Out-of-state)?
- Are they open to take out parent loans for their college tuition?
- Do they expect you to help fund tuition of children born prior to your relationship?

Protection

Do they believe in prenups, postnups, or cohabitation agreements?
Do they have or support paying for the following insurance:
- Life Insurance
- Health Insurance
- Auto Insurance
- Property Insurance
- Renters Insurance
- Disability Insurance
- Long-term care insurance
- Critical Illness Insurance

Travel

Does your partner enjoy traveling?
Do they prefer 1 or 2 big trips or a handful of small trips annually?
What should the financial split be (50/50, alternating, depends on who picks, etc)
Do they prefer to travel in small groups or larger groups?
What’s the most amount of money they have ever spent on a trip?

Career Planning

How long do they plan to be in their current position or with their current company?
What are their career aspirations?
When was the last time a promotion was awarded?
- This question can lead to other questions such as:
- Is the role at risk of elimination or lay off?
- Have they peaked in their career?
- Is this the last role before retirement?
- Or is there minimal career progression with their current employer or role?
Are they at the bottom, mid-point or top of the pay scale for their current role?
Do they have plans to continue their education to grow in their career?

Retirement Expectations

What do they think about Social Security and how dependent are they or plan to be on Social Security income?
Do they make regular contributions to an employer retirement plan?
Do they make contributions to other retirement accounts?
Have they taken early withdrawals from 401k, IRA, or other plans?
Do they have any loans against their 401K?
Do they own any stock of their employer (direct equity or Employee Share Purchase Plan)?

Investments

Are they interested in investing in the stock market?
Have they ever lost money in the stock market or another major investment?
How would they describe their risk tolerance? (risk averse, risk taker or somewhere in between)
Do they have an interest or experience in real estate investing?
Have they ever invested in the business of a family or friend?
Do they prefer to manage their own investments or have someone do it for them?

Whew! That was a lot!

Hopefully, you read a few of those questions and thought “Do I?”, “Will I?” or “Damn, that’s a good question.”

If so, this post has served you well! Don’t stop here – keep going!

Action Steps

Make a list of the topics you would like to cover with your partner. Share this post with your partner so that they can do the same.
Commit to a time and date to discuss some of the topics above (and more, if needed).
Take your time with the topics, it can be overwhelming for you and your partner to tackle in one sitting. Tackle topics bit by bit.
Think about using a safe word when conversations get to heated.
If you are already married and have been fighting over money, check out this post for a few tips to reduce them.
If you are looking for more tips, rules and ACTION STEPS to manage your own financial life, grab this FREE guide to help your on your financial journey.

Nikki Tucker

Founder & Managing Director of The FIIRM Approach

Nikki is a Blogger, Speaker, and primary financial strategist of The FIIRM Approach. As a mom, 20+year financial services professional, and Certified Divorce Financial Analyst ® she is committed to helping female breadwinners strategically prepare their finances for divorce and confidently maintain their financial security pre and post divorce. Nikki uses action-based education in her Bring Home the Bacon workshops and strategy sessions as well as her on-demand digital resource – Silent Preparation Series - so you can prepare your finances for life's major transitions.

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How to Make Money Conversations Less Awkward

Sep 19, 2017

How to Make Money Conversations Less Awkward

Stop whatcha doin’, cuz I’m about to ruin…

(If you know the song, I bet you couldn’t help finishing that line)

I actually only want to ruin your belief that money conversations are awkward or hard.

That’s it. Simple, right?

I know that discussions about money can be uncomfortable and as humans we naturally fight any discomfort.

Just think about the last time you were in an elevator.

When you entered, maybe there was one person already there. You walked to the opposite wall of the elevator.

Maybe you exchange verbal pleasantries, maybe not.

For the next 10-20 seconds, you plan to ride in silence, avoid making eye contact and stare at the elevator buttons as if they’re the most fascinating you’ve ever seen.

Then you realize there’s a foul odor (I mean F-O-U-L) and you’re trying to figure out if it’s really possible for a smell like that to be coming from this unknown human nearby.

Ding! Time to get off (Thank God)!

Maybe you say goodbye as you hurry off at your floor ( likely not because you were holding your breath until the coast is clear!)

Those few seconds of awkwardness don’t stop you from riding elevators because they are a necessity for you to get things done efficiently.

Guess what! So are your money conversations (wink, wink)

While it might not be worth your time to address the awkwardness in elevators, it’s a worthwhile effort to make your money conversations less awkward with your family and friends.

Money conversations can cover numerous topics and therefore spur a ton of emotions.

If you want your family to be open with you about their financial goals and concerns then you first, have to be open with them.

Give a little, get a little…

While my previous blog post focused on marriage and how to keep money fights to a minimum, this post shows you ways to jumpstart the conversation with your family and friends about your intentions around your financial goals.

If you want to help make your money conversations less awkward, then it’s important to start with transparency.

Use transparency to knock discomfort the hell out of your way.

Just be sure that your tone matches your intentions. For example, starting a conversation off with “we need to talk” is probably not the best idea.

Romantic Relationships

In case you need a little more help talking to the love of your life, I thought we could start here.

When there have been financial mistakes in a relationship they need to be acknowledged before you can move on.

First, accept responsibility for your mistakes, then make sure you show empathy for your partner’s mistakes.

This helps your discussions start in a neutral position and can help your partner accept the impending change.

A script similar to the one below can be used as a starting point to get your partner to understand your perspective.

Parental Relationships

Your money conversations do have to be like elevator rides. You don’t have to get on and off at the same floors every day. Visit different topics depending on the areas of your life that require the most attention.

This is particularly important when it comes to having money conversations with your parents or your children.

It is common to hit roadblocks when talking about finances with your family as some topics are inherently more uncomfortable than others.

When you are the breadwinner and you live pretty comfortably sometimes your children (adult and minor children) behave as if money falls off trees or like your paycheck is THEIR paycheck.

At times, your parents might be guilty of this too.

If this is the case, it may be time for a change.

That message of change may be hard for you to deliver and harder for your loved ones to hear.

The scripts below may be a helpful way to inform the family that a changing is coming!

Platonic Relationships

Are you the friend that can’t say “No”?

Do you have plans to save money but feel bad turning down a night of tequila and tacos with your best friends?

Do you genuinely just want to go because you love life and you love having a good time (plus you love tacos and tequila)?

When you don’t have the discipline to say NO, you need to empower your inner circle to hold you accountable. Give them permission to speak up when you might be falling off track of reaching your financial goals.

Talk to them about the support you need and allow them to be a part of your progress.

Using a script similar to the one below can help you get support and make saying NO much less awkward.

Craft your jump start script based on your own personal relationship dynamics and communicate with patience and genuineness.

Shifting your relationship with money takes time and requires patience with yourself. Getting your family on board requires, even more, patience and understanding.

The next time you get on the elevator, speak up and acknowledge everyone who’s on. It may feel pretty weird but you’re really just pushing past some discomfort. It’s merely a lab test and they’re the test dummies.

Some may respond to you and some may not, but you did your part by kicking off a conversation.

Over the years, I’ve had learned some pretty interesting things about strangers while on an elevator.

Imagine what your family can learn about you and how easy your family money conversations could be if you set the stage properly.

Nikki Tucker

Founder & Managing Director of The FIIRM Approach

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Tips to Keep Money Fights Out of Your Marriage

Sep 3, 2017

Tips to Keep Money Fights Out of Your Marriage

Dearly beloved…for richer, for poorer…

Money is so serious that it’s in your marriage vows!

Whether you’ve jumped the broom or are preparing to do so, this post is to help you keep money fights out of your marriage.

Money isn’t a topic that generally comes up during the “getting-to-know-you” phase and if it does, we don’t usually spend a lot of time diving deep into it.

While I’m all about both partners preparing for the best marriage possible I have a slight bias towards women having a good pulse on their own finances because of a few key statistics:

According to the Center for Disease Control, women live about five years longer than men;
The Census Bureau reports women’s earnings are currently about 78% of men’s and women have a higher propensity to live in poverty over the age of 65 compared to men;
Women are known to save and invest less money over time when compared to men.

With statistics like that, I know it’s critically important for women to spend time making sure our financial affairs are in order before we get into a relationship and definitely before a marriage.

Let’s get right down to business with tip #1!

#1 Patience
Yep! Patience!

If you’re frustrated just from reading the word there’s a possibility that you don’t have enough of it (just saying).

We all know that being in a relationship requires an incredible amount of compromise and patience. Matters of the heart and matters related to money are quite similar in that way.

Have you ever tried saving for a new house, a new car, funding college AND saving for retirement all at once.

It’s like taking advanced calculus and advanced organic chemistry in the same semester!

Difficult!

It’s difficult to save for multiple big ticket items while trying to maximizing retirement and investment opportunities.

You might need to delay the purchase or rework your retirement plan all together.

A lack of patience is a sure-fire way to keep the fights going in a marriage.

#2 Discuss your individual financial principles and philosophies early & often
Self-awareness is imperative to emotional intelligence and can actually help you select the right partner.

When you’re in a relationship it’s equally important to understand your partner’s decision-making process and abilities.

A high level of emotional intelligence in a relationship allows you to be aware of your partner’s emotional health and personality while managing your reactions to their emotional energy.

It can also help keep fights in your marriage to a minimum and help you understand your partner’s financial principles and philosophies.

Learn your partner’s money route – find out how their life experiences shaped their relationship with money.

Start simple by:

Asking how they feel about money
What their earliest memories of money are
Understanding their debt situation and financial goals

Listen to my interview on the Legendary Marriage Podcast as we explore this topic more.

According to a 2013 Pew Research Center study, 4 out of 10 marriages are second marriages.

In second marriages, the same items are still important but there’s added complexity.

You also need to roll up your sleeves to understand your partner’s perspective on preserving, sharing and protecting the assets they already have.

Let’s be honest. Just because they had money when you met them, doesn’t necessarily mean you’re going to get it.

On top of that, it’s important to know your own perspective (see my self-awareness comment above)!

If your new union will be blessed with bonus children, do you understand what plans are in place for the children’s protection and care? Do you know if it’s more important to your partner to teach wealth building principles to your children versus living for the moment?

In the thick of love, money & marriage…

Cake topper figurines of a married couple sitting on a cake.

#3 Understand that a marriage is both transactional and relational
Maybe the comments above about preserving and protecting assets gave you the hebbie jebbies. After all, it’s not the most romantic topic.

Hold on to your creeped out hats, folks!

As you know, marriages and some businesses are referred to as partnerships.

I’ve witnessed enough business partnerships go south because of high emotions or crazy ass behavior. I’m sure you’ve witnessed a marriage or two dissolve for similar reasons.

Transactional relationships are about an individual’s self-interests and what works best for them.

Relational relationships are about long term acceptance and choosing mutually beneficial options.

So why does that matter to you?

There will be times when decisions feel more transactional than relational. It may feel as if your partner is acting a bit more selfish than selfless (remember that time you wanted to stick a fork in his eye).

The same may be said about you. I promise that those times are often related to money.

The same Pew Research Center survey mentioned above indicates that when considering marriage financial stability ranks last!

We all know that we place a muuuuuch higher reliance on emotional aspects when deciding to get married and I am not suggesting to ignore those emotions.

However, I am suggesting to be aware when emotions, traditions or the fear of losing love, prevents us from talking about less sexy, but important, topics such as finances and financial goals.

Money is already emotional and when you add the complexities of a marriage, it brings a literal sense to the phrase emotional roller coaster.

When someone decides to start a business partnership, they are concerned about the viability of the business, the opportunity to make money and generally make a difference in their families, communities or the world.

They are concerned about both the transactional and relational aspects.

Those same considerations apply for marriage.

#4 it’s okay to break the rules
There are so many rules and traditions when it comes to marriage that is often hard to keep up.

It’s also difficult to break traditions because it makes us uncomfortable.

Heck, it even makes our family’s uncomfortable.

While it’s harder for us to adapt to change, usually it’s necessary.

Here are two examples related to marriage and money.

1.You don’t have to have joint accounts
(Gasp!)

If you have different financial philosophies than your partner it may make sense to start out your marriage with separate accounts.

If you have joint accounts today and you find yourselves butting heads over money, try splitting accounts.

Some marriages have success with keeping accounts separate forever but having one or two joint accounts for household and familial responsibilities. On the other hand, some join their finances after they get a good footing in the marriage. Having joint accounts just because that’s “what married couples do” is not a good enough reason.

Regardless of the action you choose, it’s always important to make sure that each individual feels that they have some amount of financial autonomy.

2. Discussing money is not taboo
How many times have you heard it’s not polite to talk about money? Maybe you’ve been shut down when you ask questions because “it’s not the right time.”

Of course, I talk about money for a living so my comfort level is higher than most, but it’s important for you to:
– have planned family financial discussions
– assemble your personal financial team

The days of “your _____________ (insert mother/father) handles all the finances and I don’t know anything” statements should be over.

I encourage you to be a part of purchasing decisions for big ticket items as well as smaller ticket items.

I know money can be sensitive and emotionally overwhelming at times to discuss, however, I encourage you to be FIIRM and not avoid the conversations.

While marriage may be bliss, financial ignorance is truly not.

Many may say “for richer, for poorer” but I can’t think of anyone truly interested in the poorer part.

Grab your Couple’s Financial Checklist to discover the items covered in this blog post as well as some extra details to help you and your partner stay on track to keep money fights out of your marriage.

Nikki Tucker

Founder & Managing Director of The FIIRM Approach

TAKE ACTION TODAY & LEARN about the simple things that can help make your pre & post divorce life easier - Grab Your Complimentary Divorce Support Pack today

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