In this issue:
That 30th birthday can be a somewhat traumatic event, but with people living longer, they say 50 is the new 30. If that’s the case, then you’re just a kid!
That doesn’t mean, however, that you should be childlike about your finances. If your 20s are the years when you lay the foundation for good financial habits, then your 30s are when you build on that foundation.
By now you’re likely employed in your field, possibly married or in a committed relationship, and thinking about building a family. It’s important to factor in these life events when you are planning. A financial advisor can work with you to create a solid plan and provide objective guidance no matter how investment-savvy you are.
Your priority should be saving and avoiding non-mortgage debt. Without debt, saving seems easy. And there’s a lot to save for: the wedding, starting a family, buying a house, sending your kids to college and retirement. Not to mention all the surprises in between. This is where the long-term plan you and your financial advisor create comes in. It’s important to stick to it.
Another key element is to review your financial plans periodically to make sure they still meet your goals. If you are part of a couple, consider making “financial dates” with your spouse or partner to proactively talk about money. It’s a good way to make sure both parties in a relationship are aware of the other’s goals for the future.
Before you say “I do,” it’s a good idea to sit down and discuss your finances. Even if you’re already married or in a committed relationship, scheduling a regular “financial date” to proactively talk about money will help avoid any unpleasant surprises in the future. Here are some ideas of what to talk about:
This is a good question to start a money conversation. You should discuss each other’s hopes and dreams so you can set priorities and identify savings goals.
Each of you should fill out a detailed list of your assets and liabilities. Before you can move forward, you need to know where you stand right now.
There is no best way. Whether you have joint accounts, separate accounts or a joint account just for household expenses, you need to pick a system that works for both your individual money styles.
Again, it is up to you. But, you should consider the overall portfolio and try to eliminate duplicate investments to minimize risk.
You should create a budget, set out how much you spend on groceries and other household expenses, and make sure you discuss major purchases.
Even if one of you assumes this duty, you should both discuss it and have periodic budget reviews to discuss upcoming expenses.
Will it be cheaper to add one of you to the other’s coverage instead of maintaining separate plans? When it comes to employer-provided health insurance, the costs can vary widely. Combining auto insurance is usually cheaper, provided you both have clean driving records. Also check your beneficiary information as you may need to update it.
If you and your partner or spouse are on opposite ends of the risk spectrum, you may need to compromise. It is unlikely either of you will change how you feel. Try to find a strategy that both of you can embrace.
Your spouse’s credit report won’t keep you from buying a car in your name, but if one of you has a low credit rating, it could impact joint purchases like a home. It’s better to know in advance. You can get a free credit report through annualcreditreport.com. After you review your credit, come up with a plan to improve it if needed.
Getting out of debt is the best gift you can give your spouse or partner. Start with the credit balances that carry the highest interest rates. But don’t merge your debt with your spouse’s. It would create a mess that would be difficult to sort out if you were to divorce, and if one of you defaulted, the other would be left responsible.
Four or more years of higher education may have given your child a great career start, but your graduate might still need some real-life skills on how to responsibly handle money. Now, it falls to you to fill in the gaps in your child’s financial education. Here are some important lessons you’ll want to cover before you find yourself with an empty nest and an emptier wallet.
As young adults, your children will need to know how to:
For more guidance, visit moneyasyougrow.org and consult your financial and tax professionals
Women are making significant gains in the ranks of corporate leadership and are starting to close the gap on income as well, and they have their own attitudes toward investing.
Women represent nearly 52% of the population, and American women are one of the world’s most powerful economic forces. Forty-five percent of American millionaires are women, and by 2030 it is projected that women will control roughly two-thirds of the nation’s wealth, according to research done by the American College State Farm Center for Women and Financial Services.
But even though the gap is closing on leadership and income, men and women approach investing differently. While men are more hands-on, many powerful women still prefer to have a financial advisor do the research and provide them with advice on long-term goals.
Recent research indicates many women look at their investments as a means to fulfill long-term goals, like buying a house or sending a child to college. They are more disciplined in terms of long-term planning.
Women are more willing to learn about investing and take a more active role in their family’s investing decisions. But, they would rather learn in-person than to just read about it.
Researchers don’t describe these women as risk-averse, just more thoughtful about their investment choices. They are more willing to buy an investment and hold onto it. Men tend to be more competitive when investing, but women are willing to take risks once they understand them.
Many advisors recognize that women investors are evolving, and often host seminars and classes to help more women learn about investing and gain more confidence when making important financial decisions.
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