Category Archives: FINANCIALly Yours

Financial Rules of Engagement

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Dear Blissfully Betrothed,

Congratulations on your engagement!!! Now is your chance to ensure you lay a solid foundation for a lifetime of wedded bliss. Soon, you two love birds will become one- spiritually, physically, and yes- financially. Since I’m a wealth manager I have a special little gift for you: I’m going to invest some time outlining how to successfully marry your finances. It’s an area often over-looked when it comes to marriage preparation. But with more than 50% of marriages ending in divorce (sorry- I don’t mean to be grim), and financial incompatibility being one of the primary culprits for marriage dissolution, we can’t ignore the potential threats. I’m here to tell you, if you can become one financially, you can conquer anything together. You can establish the right foundation for your marriage if you adhere to these financial rules of engagement:

1. Invest in pre-marital counseling. This is the biggest investment you can make for your marriage. Retain the services of a professional, objective, disinterested, third-party- someone experienced and competent in the area of pre-marital counseling whom you both trust and respect. They’ll help facilitate a healthy dialogue between you and your intended spouse regarding various aspects of marriage. Of specific concern are your financial deal-breakers (gambling, financial affairs, and overspending, to name a few). Some insurance policies may cover a limited number of sessions (and some churches also provide counseling sessions at little to no cost to their members). Just don’t skimp on the sessions- better to spend the time and money investing in your marriage for a few months (yes, MONTHS- not just a few sessions!) than spending your time, money, and energy filing for separation/divorce later. Just sayin’ 🙂

2. To tithe or not to tithe? Just because you and your intended spouse are both Christians doesn’t mean you both agree on the concept of tithing. Now is the time to start talking about your beliefs. Do you tithe off of your gross or net income? Is tithing a priority or do you put it on the back burner? Have a heart-to-heart talk about your views on tithing and what you will do if you disagree. The tithe represents just 10% of your gross income, but it can become the root of countless arguments if the two of you aren’t on the same page.

3. Should you get a pre-nup? This is an awfully touchy issue. Merriam-Webster defines a prenuptial agreement as “an agreement made by a couple before they marry concerning the ownership of their respective assets should the marriage fail.”  While I’d like to think that no one goes into a marriage expecting it to fail, I know that some folks want to protect themselves just in case. I’m not going to tell you what to do in this instance. All I’ll say is that if you’re concerned about being taken for “half” if your marriage doesn’t last, you need to address your concern with your fiancée/fiance. And definitely bring that up in counseling!

4. Save more for your marriage than for your wedding. Ladies, I know some of you have been planning your dream wedding since your were like 4 years old, but let’s be realistic about it. Your wedding day will only last a few hours. Your marriage is supposed to last a lifetime. Spending your entire savings for a few hours of fantasy- well, that’s just foolish (and you’re too fabulous to be foolish!).

5. Discuss your credit scores and credit history. Obtain your credit report and score from all three credit reporting agencies: Equifax, Experian, and TransUnion (you should do this at least once per year anyway). Now, swap reports! These reports will shed a lot of light about how your loved one handles their money. Are they drowning in debt? Have no credit history at all? Chronically pay bills late? These are all arguments waiting to happen if they aren’t dealt with from the door. And knowing one another’s credit scores will prepare you for making future purchases. The higher the score, the lower your interest rates. This means more money in your pocket. Check out www.privacyguard.com for your comprehensive credit report and scores (there is a fee for their service). Oh, and whatever you do, don’t go co-signing loans or going into debt for one another. No need in both of you being held responsible if one of you makes a bad financial decision while you’re engaged!

6. Discuss your spending habits. If you’re like most couples, you probably discovered by now that opposites attract. Chances are, your spending habits are at the opposite end of the spectrum as well. One person is a spender and the other a saver. Be open about who you are, what you like to spend your money on, and how you view saving for the future. Be sure to discuss your views and experiences during your counseling sessions. How you reconcile your conflicts is a major indicator of the strength of your union. [SIDE NOTE: Don’t be caught up on how much money your significant other makes. How someone handles their money is far more important than how much money they handle].

7. Draft your team goals. You and your spouse will be a team. What goals do you want to accomplish together (buying first home, building your cash reserves, planning for retirement, having children, paying off debt, etc.)? What role will each of you play in advancing your team (who balances the check book, who pays the bills, who stays home with the kids, etc.)?  And please, please, please, discuss whether or not you will be merging your incomes together. Some couples like to keep things separate, but I’ve found that the most financially successful couples merge everything together (it limits the likelihood of financial affairs). This may be difficult initially, but the long-term results far outweigh the short-term discomfort. When you operate as a team, you can win as a team.

8. Work with a professional. Consider hiring a comprehensive financial advisor (someone who takes a look at your entire financial picture, not just your investments and/or insurance) to help you each get your individual finances in order during your engagement period. Once you’re married, you will implement your plan together. Working with a competent professional will significantly increase your ability to reach your financial goals. And you’ll be less likely to make mistakes in the process.

9. Devise a plan to live off one income. Yes, you read that correctly… ONE income! In these tumultuous economic times of high unemployment rates, rising health care costs, and reduced employer benefits, chances are at least one of you will be unemployed (possibly more than once) for an extended period of time during your marriage. I’m not suggesting that you live within a cloud of gloom and doom. I am suggesting, however, that you learn to live well below your means. There is no financial peace living paycheck to paycheck. Live on one income, and save and invest the rest. When times get hard, you’ll have access to a storehouse of savings. And you’ll be able to live quite comfortably in the meantime. Now is a good time to start working towards this goal. Begin to reduce your spending/expenses now so you will each be in a better position when you’re married. Take baby steps. You’ll be walking confidently before you know it!

10. Schedule weekly money dates. Money is an emotionally charged topic. Each partner brings to the table his/her own set of experiences, values, and fears regarding money. That’s normal. You can create a high level of financial intimacy with your intended spouse by scheduling weekly dates to talk about your finances (same day, every week, for a pre-determined amount of time). Again, this may be challenging at first. So, take baby steps. Start with a 10 minute conversation and build on that each week/each month. Work your way up to having a 30 minute conversation on a weekly basis (continue doing this throughout your marriage). Talk about your fears, your progress towards reaching your goals, any challenges you face, your monthly budget, and anything else that your partner should know. Financial intimacy requires vulnerability. The more you can become “naked and unashamed” with your finances, the more your partner will delight in covering your flaws.

Remember, the two of you are striving to become one. Now is a great time to start laying a solid foundation in preparation for a successful financial future together. GO TEAM GO!!!

Practically Yours,

~The Practical Chick

Designer Baggage

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Dear Bag Lady,

There are two things on earth that most women just can’t seem to do without: a sassy designer bag and a fabulous pair of shoes. Oh sure, trendy clothes and jewelry are also high up on the list of wardrobe “necessities”, but there is just something about rocking a piece of exclusive arm-candy coupled with a mean shoe game that will make a woman feel like she’s living on top of the world. Fortunately, stand-out shoes are a little easier (and often a lot less expensive) to come by. But the availability and affordability of a distinguished designer bag makes these must-have accessories so much more desirable.

So what’s in a bag? What would make a woman spend hundreds- if not thousands- of dollars on a piece of canvas or leather? More often than not, most women are willing to go for broke for a haute handbag. Huh? Have they no hope for the future? Don’t they know the importance of investing in appreciable assets (stocks, real estate, etc.) versus depreciating assets (ie., handbags and other apparel items)? Ok, I know that some women can honestly plead ignorance (they never had any positive financial role models to follow). Yeah, yeah, yeah. I get that . But at some point, one must realize that one has a future that will likely extend beyond the cuteness of today. Why would a young lady save up several paychecks for a Louis Vuitton, and not save a dime towards her own place to live? In my experience, there is only one explanation: pride.

The Entitlement of Pride

“I work hard for my money and I earn a good living. I should be able to buy whatever I want whenever I want it.” Sound familiar? Far too often, many women buy into the notion that having a big, bad bag draped over their shoulder is a sign of accomplishment. They’re “in control” of their life. They have “arrived” in the world. It’s a status symbol. They “deserve” it. Don’t misunderstand me- there’s nothing wrong with wanting nice things and working hard for them. There is, however, something incredibly insane about spending a paycheck or two on any luxury item, but having neither an adequate savings account nor an appropriate retirement and/or education fund. Let’s not even mention how many of these purchases are made with credit cards. You should be using that money to pay down your debt, instead of increasing it! But nooooo, you’d rather go further in the hole just to give others the impression you’re not broke. Living paycheck to paycheck but rocking a Gucci bag is not cute… it’s crazy. :-/

The Insecurity of Pride

Our society is so inundated with Hollywood glamour and the lure of logo-laiden apparel it appears to disqualify those of us who are not as concerned about keeping up with the Joneses (or the Kardashians, for that matter). At a very young age, most children learn to value brand named merchandise over generic goods. One is made to feel “less than” if one doesn’t buy into the designer label craze. So, we spend money we don’t have, to buy things we don’t need, just to impress people we don’t even like or know. All in the name of popularity. Some hide behind designer labels just to fit in. Men and women alike go out of their way to sport the latest fashions solely to be accepted by their peers. Too often, we clothe our selves in Couture simply to mask our own insecurity and dissatisfaction for who we are, what we are, and where we are in life.

Unpack Your Bags!

What designer baggage are you lugging around? Maybe it’s not a pretty pocketbook or even a snazzy pair of shoes. Maybe you suffer from some other unhealthy passion for fashion or a bad case of the “gotta have its” for gadgets. Whatever the case, take inventory of the contents: mounting credit card debt? no cash reserve? no retirement fund? robbing Peter to pay Paul? Robbing God to pay Peter? You will incur astronomical spiritual, financial and emotional damage for all this excess baggage. Girlfriend, you have to get it together! Chances are, you’re bankrupting your financial future by living only for today. Will you be willing to live out of your bags when you’re old and gray with no ability to retire? Entitlement is a heavy load to carry. And the more you give into it, the heavier it gets. Insecurity is just as bad. Insecurity begets itself. You have to constantly cover up your shame in order to function publicly. How unfortunate it is to weigh yourself down in an attempt to lift yourself up.

Again, there is nothing wrong with wanting nice things. But buying things with borrowed/stolen money (via credit cards, “bill money”,  robbing God of the tithe, etc.) or money that could be used to create financial stability- well, that’s just designer dysfunction. It’s also false advertising. What would you look like and how fabulous would you be (spiritually, financially and emotionally) if you weren’t afraid to reveal the woman hiding beneath the weight of entitlement and insecurity? The heavier your load, the easier it is to fall. And trust me when I tell you, it’s pretty hard to get back up once you’re anchored in pride. So, the next time you feel the need to splurge on yourself, carefully consider your money and your motives. Get to the bottom of your baggage. Check that heavy load at the altar, unpack the contents, and leave it all right there. Better to walk away from that emotional designer baggage with your head held high than to suffocate inside the pretty pouch of pride. You deserve some breathing room.

Practically Yours,

~The Practical Chick