Are your money talks breaking you up?

This week’s blog clearly opened up the category of conversation between couples and those in a committed relationship. I got several questions as to how to go about this without hurting each other… Haha! But in all seriousness, taking care of this in a businesslike way is the best way to handle it.
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Is Retirement Saving a Joke?

Retirement Planning

Do you wish you had money to invest? Do you wonder what you should do with the money you have?
HarMoneyous™ investing is no laughing matter, and neither is saving for retirement!
In this brief blog, I’ll share the steps you need to take to get on the right path.

Decide how much each month you want to put towards investing. This may sound out of reach right now, but when you break it into bite-size pieces, it’s just like anything else. If you were to save $50 a week—that’s $10 a weekday (start taking bag lunches and nix eating lunch out)—you could save between $200-250 a month, or $650 a quarter. Now you’ve got something to work with. Even if you only have $250 a quarter saved, you’ll still have money to work with…and that’s $1000 you didn’t have saved before!

What type of account should you open? One option, should you qualify, is to open a ROTH IRA account so you can maximize your savings efforts for retirement. This account offers advantages over other types of accounts, primarily that the money deposited into it is able to grow tax-free. This is huge! With the ROTH IRA, you use money that you have saved from your paycheck. This money has already had taxes deducted from it. The beautiful thing about the ROTH IRA is that when you pull the funds out, you don’t have to pay taxes on the withdrawals. (If you’re looking to invest the savings from a retirement account from a former employer, you’ll need to open a rollover Traditional IRA account. More on that in another blog.)

There is a catch, though. With any IRA, you cannot withdraw funds once you deposit them until you turn 59 ½ , or it’s been at least five years since you made your first deposit—whichever takes longer, and you can’t make too much money. If you take the money out before the age of 59 ½ or before five years of the first contribution, you will pay a 10% penalty. After one of those qualifications is met, you can withdraw at any time and in any amount.

Open an account at a reputable discount brokerage firm like Scottrade, E-Trade, or Schwab. If you need help doing this, their customer service reps and online instructions are there to help you. Once you open the account, learn all you can on the site during the first quarter you’re saving. Some of these will have minimum requirements to open the account, so be sure you know what the brokerage you choose requires.

Invest according to your risk tolerance and the size of your investment. Often, people are confused about how to invest for retirement. They think that since they got started late, they need to invest aggressively to make up for lost time. That isn’t necessarily true or wise. The closer you are to retirement, the more conservative you should be in order to keep those dollars working instead of risking them on something that could be too risky. Secondly, if taking on a lot of risk is scary for you, then that’s something you need to consider so you can sleep at night. Additionally, if you’re investing a small amount of money, putting it in a well-diversified ETF (exchange traded fund) or indexed mutual fund could be the best route for you.
It costs money to make a trade; discount brokers offer the lowest of transaction fees. If you only have $1,000 to invest, it might make better sense to pay for one transaction as opposed to a few.

This blog is very brief, and certainly doesn’t address nearly everything you need to know or do to become a knowledgeable investor. It does, however, outline the steps you should take and open your eyes to what you might need to learn in order to do it properly. I offer coaching a programs to assist you in getting over the humps of confusion, lack of knowledge, insecurity, and accountability to make the right moves.
So if fear, confusion, or lack of accountability is holding you back from reaching your retirement dreams, I’m here for you.

What’s your next step towards achieving retirement success?

You can do this! I believe in you.

Remember, it’s your money, your rules, your way!

Money Savvy Woman © 2014

Are your money talks breaking you up?

This week’s blog clearly opened up the category of conversation between couples and those in a committed relationship. I got several questions as to how to go about this without hurting each other… Haha! But in all seriousness, taking care of this in a businesslike way is the best way to handle it.2014-10-27_1921

 

Is There No “I” Inside of Your “We?”

Having come off a weekend of facilitating transformation and realignment, my head is so full of joy at some of the lessons learned. One in particular seemed to touch most of the participants and it has bounced around in my head since then, and so you’re hearing about it today.

When working with money inside your relationship, clarity is essential. You must be clear on what YOU want as an individual before you can contribute in a healthy way to the relationship. You must be able to stand on your own two feet financially in order to offer your very best to the commitment(s) you have made.

Taking care of what you value monetarily will help you create the foundation from which you can be a better team player. If you lack the clarity of knowing what you need and want, you’ll flounder, if not sabotage, the relationship(s) you are in. You need to be able to see what works for YOU, aim for that, achieve that, and bring that success into the relationship.

Think of a basketball team. They practice daily. But what are they actually working on? Sure, they practice plays together, and defense together, but a lot of the time spent in the gym, they’re working on their individual skill level …taking shots from the paint, the free-throw line, outside the three-point line, and all the way downtown, and let’s not forget the weight room. They know that to be a member of the best team, they have to be their very best self.

For some reason, this doesn’t translate into relationships very well when concerning money. The “self” is eliminated for the cause of the “union,” whether a marriage, partnership, or even house/room-mate relationship. Especially in committed relationships, the expectation is often that the “I” melds into the “we.” This is true on one hand, but devastatingly wrong on the other. An individual doesn’t disappear once a commitment is made to another. It’s quite the opposite… they’re expected to rise up to the occasion. How is that possible if they’re expected to “disappear?”

As a money coach, I advise my clients to discover values on both an individual basis AND for the benefit of the relationship. Yes, you’re understanding it correctly, three sets of goals—one for you, one for them, and then one based upon the relationship. You’ll be pleasantly surprised to find that the lists will differ, sometimes, quite a lot.

I know that in my marriage, the thing I value most is freedom; for my husband, it’s the higher good; and in our marriage, it’s our faith in God. These values will vary between the two of you as individuals. But when you come together, the sum of the parts will equal a whole that is a combination of the two independent sets of values. Once those are combined, that third set of values is what binds the two of you together.

Once you’ve decided to join forces financially and get on the same page, remember that your financial power will be that much more than simply adding one and one that generally equals two.
In this case, your power grows exponentially. One plus one can equal three, four, or forty (according to Mae West). The choice of how much you utilize each other’s individual power is completely up to you.

Now, the individual values lists are very important, too. To create a strong and powerful money marriage, you have to respect where each of you has come from, what your potential is to bring assets into the relationship, and what you BOTH need to keep you motivated and focused.

Remember the fable of the golden goose with the golden eggs? We need to care for the geese in order to keep those golden eggs a-coming. So maybe you want to go to a ball game, the spa, the park, the beach, Europe, the Mediterranean, or upgrade the car, improve the house, or afford music lessons for your children. We have to nurture the golden goose …respect it for where it’s been and what it has and continues to provide, honor it for its contribution, care for it so it stays healthy, and reward it to keep it motivated.

Before signing off, I want to address “selfishness.” One is not selfish for honoring themselves inside a relationship—most are simply doing what they need to in order to be the best they can be. Conversely, to deny someone their individuality for the sake of the relationship is short-sighted, destined for failure (can you hear “divorce” in that statement?), and actually, the selfish move.

Be all that you can be, staying true to the values of yourself and your relationships.
Thriving is so much more fun than driving yourselves apart.

How to Talk Money HarMoneyously

Do you talk about your money? You should, no matter if you’re single or in a committed relationship… and by committed relationship, I mean a relationship where there are joint goals that need to be met… marriages, significant others, housemates, roommates, and any other situation that fits this scenario.

Conversations around money are often stressful and difficult. But when you start talking about money in a constructive way, things can really start happening. Getting on the same page financially is the key to opening the door to your success.

Money talks should be taken seriously—they’re all about the business of you. Think of them as a business meeting and behave accordingly—no booze, no date-like candles or dinners—just talk. Think strategies.

Here’s what you can start your talks with:

  • Who is going to pay the bills? When? Using what methods?
  • How are your savings growing? Are they being kept in a high-paying account? If not, is it time to move those funds?
  • If you don’t have savings, how much do you need as a safety cushion? Six to 12 months’ of expenses is the rule of thumb now.
  • How often will you meet to discuss your money? I suggest semi-weekly, monthly, quarterly, semi-annually, and annually. A likely schedule of topics could be:

o   Semi-Weekly—Touch base on what bills and income have come in mid-week (about 5-15 minutes) and “planning/results” meeting over the weekend (about 30-60 minutes).

o   Monthly—How did things work out over the course of the month? Review your performance in spending, saving, and giving.

o   Quarterly—What expenses do you have to pay quarterly? How is your income and spending? Are you saving appropriately? How are you investments doing?

o   Semi-Annually—You’re half-way through the year now. Are you moving toward your goals at a rate that pleases you? What do you need to tweak to make things happen more easily?

o   AnnuallyReview your overall performance for the year. Check on your insurance policies and investment decisions, too.

One of the main pitfalls to money talks are unmet expectations. Expectations should be expressed fully during these talks. It’s when you expect your partner to know what you expect without telling them—essentially you’re asking them to be mind readers—that things go awry when they miss the mark. Be open, honest, forthright, well-intentioned, and sincere. You can also add, be forgiving, understanding, patient, and even more forgiving. There will be times when you become disappointed in yourself and your partner(s).

 

Here are some great phrases to smooth out the wrinkles, get to the heart of the money matter, and find resolution and progress:

  • I am upset. This doesn’t mean that you are a bad person… it means that if you could just listen, I would feel incredibly (respected/heard/loved).
  • I don’t need you to see this exactly as I do. But I do need you to hear where I am coming from.
  • I was making a big deal out of something that just isn’t that important. I want to let it go.
  • I am your friend. It’s painful seeing how quickly you can become my enemy.
  • Talk to me like I’m someone you love.
  • I can see that I’ve missed the point. Please give me another chance.
  • You are not being crazy. I can see why you’d be upset with me.
  • You don’t have to agree with me, but it hurts when you don’t take me seriously
  • Are you in the space to talk?
  • I’m sorry that I acted as if there was only my reality.
  • I am not ________ who hurt you in the past, I am ________ who loves/cares for you now.
  • It’s hard to trust you when you don’t do what you say you’ll do.
  • I’m not going to clobber you. I only want to repair this with you.

All the statements above are taken from, “Talk To Me Like I’m Someone You Love,” by Nancy Dreyfus, Psy.D.

With respect and forgiveness as two of your greatest tools, you should be talking much more effectively. When you take action and learn how to talk to yourself and others, you can gain more clarity around your financial habits and goals, enabling you to be more intentional and on-purpose.

You can do it! I believe in you!