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Do You and Your Spouse Have Congruent Spending Habits?

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Most married couples take a “divide and conquer” approach to household tasks and chores. One spouse might handle weekly shopping, the other might handle garbage and recycling. One spouse might handle laundry and cleaning, the other might handle yardwork and maintenance. One spouse might drive the kids to school, the other might handle pickup and extracurricular activities.

But household spending and budgeting is one of those responsibilities that’s best tackled together. Money issues are one of the biggest sources of marital tension, and a leading factor in divorces. Here are five ways that you and your spouse can make sure you agree on your household spending, avoid surprises, and maximize the Return on Life ™ your money provides.

1. Have an open and honest discussion.

Many couples assume their attitudes about money are aligned. Then one day the roof needs an emergency repair that taps a savings account, or someone walks in the door with an unexpected splurge purchase (or worse yet, hides it!).

Stressful situations are not the ideal time for a couple to discover significant differences in spending habits. Sit down with your spouse and have a thorough review of your finances and your monthly budget. Find compromises that will allow you to save for the future while still enjoying your present.

2. Understand the total household cash flow.

In many households one spouse often handles all of the bill payments. This can lead to misunderstandings and arguments about where the money goes every month.

Both spouses should understand how much the household spends every month and how your bills get paid. If you’re the one who’s usually in charge of bills, take an hour to walk your spouse through your process. Show him or her which bills are paid electronically, which are paid by check, the monthly amounts, due dates, etc. This won’t just help both spouses understand the monthly cash flow, it will ensure that both spouses can handle household finances in the event of an emergency.

3. Be transparent about all assets and liabilities.

Newly married couples might still have banking or credit accounts that are only in the original account holder’s name. The other spouse might not find out about these accounts until a credit card is maxed out, or a checking account is overdrawn.

Again, the less stressful your reason for talking to your spouse, the more positive the outcome will be. Financial secrets tend to come out at the worst times, compounding stress, hurt feelings, and strain on your budget.

Your spouse should be a cosigner and beneficiary on all of your accounts and vice-versa. If one of those accounts carries a large liability, get out in front of the problem and talk about how to start paying it down. Discuss the ramifications of combining any large individual assets with a tax professional or your financial advisor.

4. Agree on a budget.

If one spouse is responsible for budgeting and bill pay, that person often becomes The One Who Has to Say “No.” No eating out this week. No weekend trip to the waterpark. No new cell phones. No new clothes.

No fun!

Nobody likes being in that position, especially if you’re saying “No” to your children. Eventually, you or your spouse will resent being The One Who Has to Say “No.” You should both understand the household’s monthly cash flow and agree on how your money is – and isn’t – spent.

5. Get help

WFP clients have access to a tool within our financial planning software that help households set and maintain a budget. If you’re a small business owner, Intuit offers a line of bookkeeping and tax prep solutions to fit any needs. Automating select bill payments and regular contributions to retirement and savings accounts can also help to clarify your monthly budgeting picture.

Finally, if there’s a spending gap between you and your spouse that seems impossible to bridge, we can be an excellent resource. It’s important to us that we understand where clients’ attitudes about money come from, how they’ve developed, and how they can diverge between couples. Facilitating this dialogue is key to making sure both people have the best life possible with the money they have…and we can help you do that.

Five Lessons To Remember During Bear Markets

The Stock Market has been trying to teach these lessons forever…

The real value of a bear market may be that it gives investors, who are temporarily frozen within its grip, the opportunity to learn or relearn important lessons regarding risk and diversification.

For savvy investors, a bear market also creates a period for looking beyond emotional headlines and studying the hard facts – facts that can ultimately place them in a position to take advantage of coming opportunities.

Periods of falling equity prices are a natural part of investing in the stock market. Bear markets follow bull markets, and vice versa. They are considered the “ebb and flow” of wealth accumulation.

Staying Calm Can Pay Off

Bear markets create apprehension in the minds of many people. That’s natural. However, any feelings of anxiety should be balanced with reason for anyone seeking financial success.

Anyone dubious about the need for a stable outlook should consider that virtually every bear market was followed by a better than average annual rate of return from the subsequent bull market. 

Five Lessons to Understand

Instead of taking a “time out” from the market, and missing out on potential opportunities, investors should focus on five key lessons the market has repeatedly been trying to teach everyone during its naturally occurring economic cycles:

  1. Periods of falling prices are a common part of investing in the stock market.

  2. An investment’s value will be greatly influenced by fundamental factors, such as profit and revenue growth.

  3. Diversification, while it does not assure against market loss, often provides the safest haven against the ebb and flow of changing markets.

  4. Invest over time, rather than make single lump-sum purchases. In other words, falling stock prices are the friends of dollar cost averaging investors (of course dollar cost averaging cannot guarantee a profit or protect against a loss in a declining market).

  5. Take a long-term view when investing in the stock market. Short-term fluctuations are natural. (The investment price and underlying business often have little to do with each other over the short term.)

Planning Matters

Remember that you’ll be inundated with all kinds of economic information during both bear and bull markets.

There will be reports, for example, about inflation, interest rates, and unemployment figures that may entice you to either give up on the stock market or invest in it to the exclusion of investments paying relatively smaller returns.

To avoid being lured to either extreme, develop a financial strategy that accounts for risks you find comfortable.

Review your investments on a regular basis to help ensure they are still relevant to your overall financial plan, and that you’re staying on track.

Then trust yourself and stick with the plan.

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Will Rising Mortgage Rates Slow Down Housing?

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Will Rising Mortgage Rates Slow Down Housing?

Housing prices have increased every single month for the past 12-years

The housing market has been frustrating for buyers and a boon for sellers, but there are signs that those frustrations might be easing – depending on where you live.

Would-be buyers have struggled with historically low inventories, crazy bidding wars and now have to add rising mortgage rates to their worry list. Sellers on the other hand have been rejoicing as average housing prices continue to increase month-over-month and year-over-year, with average home prices jumping 15% in the last 12 months.

But sellers also face a dilemma: where do they go if they do in fact sell? And while there are signs that 2022 might see some cooling off, there are also signs that the relief will be too little – and maybe not at all in certain markets.

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Retire on Purpose to Get the Best ROL

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Many new retirees feel lost without their jobs. But often what these struggling folks are really missing is the sense of purpose that their careers gave them. Even if you didn't love everything about your job, work gave your days structure and a sense of meaning as you put your skills to good use and provided for yourself and your family. That's why our Life-Centered Planning process puts such a strong emphasis on preparing you for the transition away from work and into a new phase of life where purpose itself can be redefined, and even deepened. 

Answering these two questions could help you find that purpose and keep getting the best life possible with the money you have in retirement. 

 1. What is important to me?

Under normal circumstances, new retirees often spend weeks, months, or even years taking stock of their lives and reassessing their priorities.

The pandemic, and now the war in Ukraine, have accelerated that process of reflection for many retirees. When the future feels uncertain, we tend to cling to the things that we do feel sure about: our loved ones, our passions, the goals that we want to accomplish.

The good news is that those foundational elements of life are exactly what seniors can build their retirement around. Even if you decide to take a part-time job, you'll have some flexibility to include the people and activities that make your life meaningful in your new retirement routine.

For many, an ideal retirement week mixes smaller, everyday pleasures with progress on long-term goals. You might schedule a couple afternoon lunches or rounds of golf with retired friends around the online classes you're taking to earn your Master's. As you're preparing for that big "bucket list" trip to Europe, you could make a few extra weekend trips to watch your grandkids play baseball.

There's no right or wrong way to orient your retirement around the things that are most important to you, and in many cases the process involves some trial and error. Our life planning tools can help you gain clarity on what really matters. Then, we can filter those things into a draft of your ideal week in Retirement.

 2. How can I use my resources to make a difference?

Three of the most valuable resources a retiree has are money, energy, and time. Many of our clients have told us that the older they get, the more value they assign to those last two.

Which isn't to downplay the importance of money. You should be proud of all the hard work you put into building your nest egg. Now that you're no longer focused on saving and investing, embrace the possibilities for fun, relaxation, connection, exploration, and purpose that your money provides.

 But also think about the causes that could benefit from your generosity, the issues in your community that you could improve with a sustained charitable giving plan, the legacy you could leave by starting your own family foundation.

Then, think about how you can move beyond money. Your favorite local nonprofit might appreciate your gratis marketing or web security skills even more than your monthly support. If you especially enjoyed helping new workers find their feet during your career, you might become a tutor or mentor.

Making strong connections between your resources and what's most meaningful to you will be key to discovering your purpose in retirement. The process isn't always easy, and it rarely follows a straight line. But it can be one of the most rewarding journeys you'll take. We're always available to help you plan for the next step and your ultimate destination.