Plan ahead: Financial advice for couples

Bay Area

Getting on the same page financially with your partner is really important, but only 1 in 5 couples are making important money decisions together.

Local financial advisor Sam Gaeta from Defined Financial Planning is here with three questions you should be discussing with your partner right now.

Q: Why is this a good time to be talking about money?

· One-third of couples say finances are a big source of stress in their relationships. It’s also one of the leading causes of divorce.

· During the pandemic, more money stressors were added into the mix like job loss, working from home and trying to figure out how to make ends meet during such uncertain times.

· Now that the world is opening up, it’s a great time to start talking about your money habits and budget moving forward. You’ll be more successful financially if you work together as a team! 

Q: What are the questions couples should be asking each other?

  1. Do we have an emergency fund?

· A recent study found 51% of Americans want to improve how they save for unforeseen expenses.

· For many people, the pandemic forced them to dip into those emergency funds and now many are focused on rebuilding their savings.

· Start by creating a budget so you know how much money you are able to contribute each month to your emergency fund.

· Discuss how much each of you make, look at your monthly bills, come to an agreement on what is considered “our” expenses, and decide how much to put into a savings account. 

· I have a budget worksheet on my website, definedplanning.com,to help you get started. 

2. How much debt to we have?

· A top financial priority post-pandemic should be getting your debt under control. A new poll found 51% of American adults added to their credit card debt during the pandemic. That was up 23% from May 2020.

· As a couple, create an inventory of your debts, including how much you owe and the interest rates you’re paying.

· A debt worksheet can help you keep track of balances, due dates, minimum payments and interest rates, and I have one on my website.

· Setting up automatic payments can help you make sure you don’t miss a payment. Getting hit with a late fee only adds to the problem.

3. Are we saving enough for retirement?

· The pandemic prevented millions of Americans from contributing to their retirement accounts.

· Get your retirement savings back on track by including it in your monthly budget.

· Put away money, even if it is a small amount, each month via direct deposit or automatic transfer so you won’t be tempted to spend it. 

Q: How can couples keep their finances on track?

· Be easy on yourself and your partner during this stressful time. It is okay to make mistakes and adjust things along the way. 

· Set up an informal, quarterly meeting to make sure you and your partner stay on the same page.

· Consider an annual meeting with a financial professional who can help make sure you’re on the right track.

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