Purpose, Priorities & Return on Life

Purpose, Priorities and Return on Life
by Mark Olson

Throughout our flawed and complex world, there is a consistent downward drift away from the elements in our lives that matter most. Slowly, over time our best intentions often become distorted by a wide range of influences that include the urgent, our culture and our own predispositions.  Most of us yearn for excellence, alignment and fulfilment but often find ourselves being complacent, confused and frustrated because we fall short of all we can be.

One dominant illusion created by our world of finance is that we will be fulfilled and content if we maximize our income, portfolio returns and net worth.  While industries spend massive amounts of time, money and energy promoting those outcomes, deep in our hearts we know those portrayals just aren’t true.

I’m hopeful the following two recommendations will spur you on as you fight against the downward forces in your circumstances and maximize the return on your life . While both may be simple and familiar, they represent missing links in most of our lives.

Clarify your purpose

Author Rick Warren has highlighted that “personal fulfilment, satisfaction and meaning can only be found when we realize that it’s not about us and we discover our purpose by figuring out what on earth we are here for.”

Helping people find hope after loss, loving God and loving others, or teaching and inspiring students to be more than they thought they could be, are some examples of a compelling purpose.

Determine what life priorities matter most to you

It’s amazing how even the most intelligent and gifted individuals often go through life without slowing down long enough to define the life priorities that matter the most to them.  They are not alone as mathematician and theologian Blaise Pascal stated, “The last thing one knows is what to put first.”

Honoring God, leading your family and caring for others are examples of meaningful life priorities.

When life priorities that matter most are defined, they provide guidance at every fork in the road, which increases the probability that what matters most is accomplished.  Without those priorities in place, critical decisions are often based upon urgent, shifting, less important factors which can lead to regrets about “what might have been.”

Commit to clarifying your purpose and determining what life priorities matter most. If you do, it will direct your actions, counter the downward drift and maximize the return on your life.

Summer Savings

TIPS FOR HOMEOWNERS TO SAVE THIS SUMMER.

This is an opportune time for many homeowners to tackle different remodeling projects around the house. Before the season officially begins on June 21, here are some tips for saving on these new additions.

Use longer light hours for landscaping needs

Graduation parties, barbecues, and holidays add up to a higher likelihood of hosting family and friends in the summer months. Early summer is a great time to get a head start on landscaping projects that will bring your yard to life. Although retail sales may be tough to find, opting to complete yard work on your own can bring sizable savings compared to hiring a landscaping company.

According to improvenet.com, the median cost for yard maintenance services in the U.S. is $226 per month but can cost up to $700 per month on the top end.

Exterior painting on a budget

With college students home for the summer, homeowners may look to student-run painting services for exterior paint jobs. While the quality might not reach the level of expensive professionals, serious savings can be had for a decent paint job.

Homeadvisor.com reports that the average homeowner spends between $1,714 and $3,682 to paint their house. Student-run services will often be in the lower price range and able to beat other professional quotes.

Rack up savings on an early-summer roof replacement

According to Angie’s List, late summer and early fall are the busiest times of the year for roofing contractors, giving homeowners an opportunity to rack up savings by scheduling their project for early summer. Unpredictable spring weather in the previous months makes June an ideal time to contact a roofing company and get the project underway.

Expect to pay between $3 and $7 per square foot, with the average total cost ranging from $4,900 to $14,100.

Save by strengthening home security

Though many summer projects can include a great deal of labor, one way to save without breaking a sweat is installing a home security system. The cost of installation can vary, with a DIY project ranging from $50 to $300, while a professional system can range $300 to $1,500.

Savings then come via reductions in your home insurance rates, with some insurance providers offering reductions of up to 25 percent for those with installed security systems. Before moving forward and counting on these savings, check with your current insurance provider on the discount offered and if only specific systems qualify.

Hot deals on cold weather needs

Products that are intended for winter use can have substantial savings in the summer months. One of the best areas for savings is in furnace inspections and replacement. By scheduling a furnace inspection in the summer, you will ensure that everything is running properly and may be able to score a discount on the inspection cost with lower seasonal demand for technicians.

In the event that a replacement is needed, many installation companies will have unsold inventory from the previous winter available at a fraction of the price. According to Angie’s List, inspections cost as little as $60 to $85 while a new replacement gas furnace ranges from $2,250 to $3,800.

Also, look to score a deal on a snowblower in the coming months. While most consumers are shopping at the local power equipment store for lawn mowers and weedwhackers, you can often pick up last year’s models on sale. Already in recent weeks, both Home Depot and Walmart have run sales of 30 percent off or more and expect these discounts to pop up throughout the summer.

Biggest Retirement Savings Mistakes

BIGGEST RETIREMENT SAVINGS MISTAKES.

According to Northwestern Mutual’s 2018 Planning & Progress Study, a shocking 21 percent of Americans have nothing at all saved for the future, and 78 percent say they are extremely or somewhat concerned about not having enough set aside for retirement.

Everyone’s path to retirement is different, but there are general rules that can help guide your savings strategy over time. Here are retirement tips for each stage of your life:

Your 20s: Not taking the advantage of time
Fresh into your new job out of college in your 20s is an exciting time and can set the foundation for a successful financial future. The biggest mistake to avoid during this time is not getting started early and missing out on the most powerful retirement savings factor out there: time.

Recency bias can push young savers to dedicate more than is required to student loans lessening the ability to compound savings. It may be natural to think of retirement as a lower priority since it is decades away compared to student loans, both can be done at the same time.

Be sure to understand how your employer’s match works and maximize this if possible. Even if you have doubts about your current job in the long-term, most retirement savings can be transferred to your next employer or an individual retirement account should you choose to switch jobs.

Your 30s: Getting housed in
Life changing events such as marriage and children will likely start coming into play during this time. As these events occur, some savers may find themselves buying a house too early.

While you should not feel pressure to stay cramped-up in a small apartment, be sure look at your first home purchase from all angles. Buying a home too small for your growing family might not work for your needs years down the road. Spending lavishly on a big home might seem sensible now, but consider what happens in the event of a move or job transition.

Your 40s: Shifting your focus
Your early years are considered the accumulation phase but do not think that your 40s are a time to neglect retirement contributions. By this time, there are may be many different areas that need financial attention in your life. How much should you be setting aside for your child’s education? Should you use that new bonus for a home remodel?

Questions during this time can get complex and it is important to prioritize what saving areas need the most attention. Now is a good time to consult with your GuideStream financial advisor to break down these various areas and your goals for each.

Your 50s: Inaccurate assumptions
By your 50s, you likely have a clearer picture of what your savings situation looks like and can begin preparing for when you want to retire and the expenses you expect to have.

Too often, savers underestimate what they will need throughout retirement. According to a recent study featured in Wealth Professional, 15 percent of retirees globally do not have enough income to live comfortably and another 43 percent say they could have used a little more income after retiring.

Similar to your 40s, these decisions of when to retire and how much will be needed can be complex to navigate. With the help of your GuideStream financial advisor, consider all of the factors that may be in play. These can include upcoming healthcare costs, what happens in the case of an underperforming market, and other scenarios.

Planning Your Estate

PLANNING YOUR ESTATE
by Scott Blakemore

What is your dream sportscar? Corvette, Mustang, Porsche, Ferrari, Lamborghini, Bugatti, McLaren? Now, imagine you own it and decide to give it to your son or daughter … but they don’t know how to drive … because you never taught them. You just hand them the keys and say, “Good Luck!”

I think we can agree this strategy is a little crazy and unwise.  However, when you and your spouse are deceased, and your heirs inherit your estate without understanding how it was managed and for what purpose – it is the equivalent of handing a sportscar to an untrained driver.

I speak with clients daily about retirement cash flows, portfolio allocations, distribution timing, and taxes.  And while those things need to be understood and managed for a successful retirement, planning for the transition of an estate is equally crucial – especially if you’re concerned your heirs may not be ready to manage it or worse, you fear it might destroy them.

I know talking about death can be uncomfortable, and kids rarely want to discuss a future where their parents are gone.  But that day will come whether we like it or not. Talking about death with your children is like talking about sex – always a bit awkward, but the earlier the better.

So how do you prepare to talk to your children about your estate?  Here are several simple ideas to get the conversation started and a few that dig a little deeper.

First, the easier items to implement:

  • Talk about your funeral.  Write down your wishes and share them with your family.
  • Keep your bank, investment account(s) and insurance beneficiaries up to date.
  • Introduce your family to your Financial Advisor, CPA and/or Attorney.
  • Use Estate planning tools.  Let the family know if you have a Will or Trust as well as Durable and Health Care Power of Attorney (POA) documents.  Make sure your designated representative is willing to serve, understands your wishes, and knows where your documents are located.

Second, the more involved items to consider:

  • Have an annual family meeting to discuss any changes you have made to your financial or estate plan.  Be sure to allow time for questions.
  • Bring heirs into the conversation with organizations where you volunteer or provide financial support.
  • Create a family foundation or donor advised fund to give together during your lifetime. This is a great teaching tool.

These items will obviously require some work.  However, with your heirs being part of the discussion, and doing the work alongside you, you can be confident they not only hear and see your values but participate in them as well.  They will experience the legacy you are trying to create while learning valuable lessons about managing the resources that will one day be under their stewardship.

Remember, learning to drive isn’t accomplished through watching a YouTube video, and neither should learning how to manage an inheritance. I encourage you to work through the fear and discomfort and invite your children into the conversation to create a legacy impacting them and our world for good.

Retirement Planning for Small Businesses

RETIREMENT PLANNING FOR SMALL BUSINESSES.

Planning for retirement as a small business owner is important for you and your employees. Small businesses have unique needs. Thankfully, you have various options when it comes to retirement plans and a little bit of exploration can help you find a solution that best fits the needs of you and your employees.

Some of your retirement plan options include:

  • SEP IRAs
  • SIMPLE IRAs
  • Traditional or Safe Harbor 401(k)s
  • Profit-sharing plans

Simplified Employee Pension (SEP) IRAis funded by employer contributions. Benefits for all employees must be uniform (ie: the same percentage of compensation). Contributions are limited to the lesser of either 25% of the employee’s compensation or $55,000 per year. SEP IRAs allow you a relatively low-maintenance way to contribute to your employees’ retirement, and contributions are deductible by the employer for income tax purposes.

Savings Incentive Match Plan for Employees (SIMPLE) IRA allows for both employer and employee contributions. Employee contributions are limited to $12,500 per year, and employers have to either match up to 3% of employee contributions or contribute 2% of the employee’s salary.

Like a SIMPLE IRA, a401(k) Plansallow employees to save money in a tax-deferred account for retirement. Traditional 401k plans hold “pre-tax” money, so the money will be taxed when it’s withdrawn from the account for retirement expenses. 401k plans can be set up to allow Roth (or “after-tax”) contributions as well. Employees can contribute a regular amount into the account, straight out of their paycheck. 401k contribution limits are significantly higher than Traditional IRA limits. An employee could defer $18,500 for 2018, plus an additional $6000 if he/she is age 50 or over. Employers can choose to match funds contributed by employees. Keep in mind that 401k plans require a bit more administrative work and legal documentation. A Safe Harbor 401k plan mandates employer contributions.

Profit-sharing Plangives employees a portion of company profits. Employers have a great deal of latitude when it comes to contributions: employers can give as much as they want (up to the annual contribution limit, which is the lesser of $55,000 per year or 100% of the employee’s compensation) or none at all, depending on the year’s profits. Contributions do have to be distributed proportionately to the employees. The administration of a profit-sharing plan can be burdensome for some employers, depending on the number of participants in the plan.

There are two major things to consider when selecting a plan: contributions and administration. If you’re considering starting a plan for yourself and your employees, you should discuss your options in detail with your financial advisor and your CPA.

*information adapted from an article written by Advicent Solutions, an entity unrelated to GuideStream Financial. 

Cost & Timing of Home Remodeling

COST & TIMING OF HOME REMODELING.

As with many large purchases, timing matters when remodeling a home. Each season holds advantages for different types of projects based on price and availability.  Consider these tips to take advantage of potential savings:

Fall: Pools, kitchens, and appliances
Though pools and summer are tightly linked, waiting until fall for installation can bring worthwhile savings. With the average cost of installing an in-ground pool at $49,224, those savings may be worth the wait.

Kitchen remodeling is among the most popular renovation projects and can be done at any time of the year. Scheduling this project for the fall capitalizes on a slower season for contractors, which can result in lower labor prices. Also, in terms of convenience, tearing apart the kitchen might be easier once children are back in school. While some kitchen renovations can fall in the $10,000 to $15,000 range, expect closer to the average of $22,530.

Fall can also be an ideal time for purchasing new appliances. In preparation for the holiday shopping season, most manufacturers will introduce their new models in the fall, resulting in sales on previous models.

Winter: Decks, bathrooms, and air conditioning
Ideally, you’ll want a new deck ready to go once the weather warms up but winter is actually the best time to schedule the preliminary planning and design process. This is a dead season for deck contractors and allows your project to be their top priority once the ground softens in the spring. While the cost of building a new deck varies with size, expect anywhere from $2,000 to $7,000.

Competing with the kitchen for the most popular home renovation is the bathroom. Again, indoor work such as this can be completed at any time of the year, but lower rates are more likely during contractors’ slow winters. This should make it easier to schedule the contractor and may lead to a quicker completion. Homeowners tend to spend an average of $10,167 on a new-look bathroom.

While air conditioning is likely the last thought on most consumers’ minds during the winter, this is the time for big savings on both repairs and replacements. Once spring and summer heatwaves kick in, rates will jump back up. The average cost for an A/C repair is $342, while a replacement is $5,465.

Spring: Windows and flooring
Window replacements become common in summer once homeowners start running the A/C, but getting ahead of the curve will help score a deal on installation. Be on the lookout for window companies offering sales to kick off the season and ideally schedule installation once it warms up to over 50 degrees. Prices vary widely based on home size, amount of windows, and type of windows. The average cost for a single-story home with 10 windows is between $3,000 and $7,000.

Late spring is also a great time to pull the trigger on flooring. Early spring can be busy for flooring companies as homeowners begin spending their tax returns, causing tighter scheduling. May is the sweet spot, being right in between this tax-return season and summer’s peak home buying season. Hardwood flooring averages between eight and $10 per square foot with installation while carpeting averages around $3.50 per square foot with installation.

Summer: Paint, landscaping, and furnaces
Demand for almost every renovation project increases during the summer, but there are still deals to be scored. As high school and college students take a break from the classroom, many of them will look towards the popular student painting services for employment. Student-operated painting crews boast substantial savings compared to the labor of professional crews, which should help trim down the $4,000 average cost of an exterior paint job.

Additionally, landscaping and yard work make the most sense to be completed during the summer when the work will be most visible. Though it may be tough to find any deals with the high demand, long summer days allow for more DIY opportunities to cut costs.

Lastly, like air conditioning in the winter, savings can be found on furnace repair and replacement in the summer. Average furnace repair costs are a little less than A/C, coming in at $287, while replacement costs an average of $4,237.

Don’t Take Our Word For It

DON’T TAKE OUR WORD FOR IT. . . Thoughts from your GuideStream Team

Any professional has a built-in bias for their work due to their passion and understanding of their industry. Ours is no different. However, if we ask everyday people about retirement planning, it is interesting to hear what they share.

MoneyTips (an online financial forum) recently surveyed retirees about the advice they would give those still working and how retirement has differed from what they expected. We think their answers are insightful and we want to offer a few suggestions as well.

When asked, “What is the best advice you would give to people planning to retire?”

36.8% said to “start planning today” o Time is your friend when it comes to money. It is much harder to save later in life which often leads to working longer than planned. 

28.7% said to “save more than you think you need” o General rule of thumb is save 15% of your income. If you have contribution matching from your employer, that is a great way to start earning an instant return on your savings. 

26% said to “take care of your health” o We only get one life and it is easier to keep it healthy than try to get it back once lost. We consider food and exercise an investment equally as important as saving for your retirement. Don’t neglect it. 

Literally, 91.5% of retirees listed one of these 3 pieces of advice as the MOST important thing regarding their FUTURE retirement lives. We agree with them and help clients think about these things.

Second question was, “What are your biggest miscalculations about retirement?”

20.9% answered, “how unhealthy I would be” o This is the one area of retirement where it can seriously jeopardize the best prepared plans. Healthcare is a huge expense and unless properly planed for; can financially ruin people. Medicare and Supplemental insurance are key. 

19.4% answered, “how much more I needed to save” o Understanding future cash flows is critical. Social Security should be considered as one piece of your plan, not your entire plan. We help people understand the savings and expected portfolio returns ‘math’ and how it helps fund their retirement. 

14.3% answered, “how bored I would be” o Retirement can be a great time to volunteer, help with grandkids, write about your childhood for your children and grandchildren, teach someone something or learn something new with your spouse. Just get involved doing something you enjoy or find fulfilling. 

10.1% answered, “how much longer I would live” o This is called Longevity Risk and it is real. Advances in medicine continue to improve lives and longevity. If retired at age 67, your life expectance is 85 if male and 87 if female. Many will live into their 90’s, therefore it is best to plan for it. 

Nothing about our future can be predicted with 100% accuracy, however, by understanding what decisions and situations we may face helps us take appropriate action today. That is the true power and value in planning and we recommend having a trusted guide by your side through the journey.

*MoneyTips Retirement Survey Findings January 12, 2018

Financial Education Basics

by Kirk Hoffman

For many children, basic financial education is not part of their school curriculum.  Many adults didn’t have this offered either and generally learned from their parents or on their own.  Here are some financial education basics that you can share with your children to help them be better prepared.

Clarify your financial experience
Share your own perspective on money, including how you got to where you are now, your views on cash management, debt and liquidity, and how your outlook has changed over the years.  Sometimes the discussion of financial matters is uncomfortable or considered taboo.  Being open about financial issues is a great benefit for your children and can help them avoid mistakes that you might have made.  Let them know if you’ve managed things yourself or if you’ve had a financial advisor.  

Establish and maintain a simple budget
Budgeting in its most basic form is just a plan for spending.  Teach your children to think about how their purchases impact one another and how the budget can help them make better spending decisions.  You can use anything from a simple spreadsheet to an online tool like Mint.com.

Encourage savings and investing
Saving and investing are tools for reaching financial goals.  Explain different saving and investing alternatives.  Share the choices you’ve made in your own plan.

Establish a bank account
Help your children learn what a savings and checking account are.  Show them how to view the accounts, how to make deposits, withdrawals, transfers, and how to write a check.  Explain how to balance their checking account.  Teach them how to read a bank statement.  Get them in the habit of reviewing their account regularly.

Learn about credit
Explain how credit cards work and how you feel they should be used.  Explain how mortgages, car loans, and personal loans work.  Discuss how to build a positive credit history.

Stress the importance of insurance
Encourage your children to establish an emergency fund. Help them understand the importance of homeowners and auto insurance, life insurance, disability insurance, health insurance, and long-term care insurance.  Share how you have used insurance in your own plan.

Encourage retirement planning
The earlier you start planning for retirement, the more funds you will accrue.  Explain how Roth and traditional IRAs work.  Talk to your children about company sponsored retirement plans like Roth and traditional 401(k) plans and how to take advantage of company match offers. 

Develop financial relationships
If you have a financial advisor, give your children the opportunity to meet with him or her on their own. This can give them the opportunity to ask questions they may be embarrassed to ask when you are there.  Use your financial advisor as a resource to help explain any of these issues.

Don’t take for granted that your children know the basics.  Discussing these with them is a good way to see how much they already understand and it allows you to share your values in these important areas.

Year-End Financial Checklist

As we near the end of the year, it is time to look back at what has happened and see how it will affect your financial future. Check off these important items so that you can start the new year’s finances with peace of mind.

Review your tax withholdings.
Have you had a major life change (employment change, marriage/divorce, a new child) that affects your income tax? Check to make sure your tax withholdings have been properly adjusted. Having low withholdings can lead to tax penalties, while having too high of withholdings prevents you from accessing your money until your tax return is filed.

Donate to charity as a way to reduce taxes.
You can lower taxable income by 50 or 30 percent with a gift to a public charity or by 30 or 20 percent with a gift to a private foundation. If your gift exceeds these limits, you can roll over the excess deduction for up to five years.

Reduce your estate through gifts. 
You are permitted to give up to $14,000 ($28,000 for married couples) a year per recipient as an untaxed gift. Gifts above this value will consume part of your lifetime gift/estate tax exemption amount ($5,490,000 in 2016). If a gift directly funds education tuition or pays for qualified medical expenses, it will go untaxed no matter what the value.

Check to see when you last rebalanced your portfolio.
Although you don’t need to update your investments every year, many people go far too long without making necessary adjustments as they age. As GuideStream clients, we monitor your account and rebalance your portfolio a minimum of once per year.

If you are retired, make sure you have taken all necessary required minimum distributions (RMDs).
RMDs may be one of the most important items to review when going over your finances at the end of the year. Standard IRAs require these distributions be taken annually after the year you turn 70 ½; standard 401(k)s require them annually after you retire or turn 70 ½ (whichever is earlier). Failure to take an RMD will trigger a 50 percent excise tax on the value of the RMD. At GuideStream, we strive to be proactive in helping our client’s awareness of their RMDs. However, if you ever have questions, please contact us immediately.

Max contributions to an IRA and employer retirement plan for the year.
Both IRAs and 401(k)s have annual contribution limits. If you find you have excess savings and have not reached your annual limit, it may be a good idea to make additional contributions. Similarly, you may also consider making greater monthly contributions to your accounts next year, spreading out the cost of contribution. The deadline for IRA contributions is usually April 15 of the following year, though this may vary; 401(k) deadlines may be restricted to the calendar year, depending on your employer. If you would like to make a contribution, we are always available to help.

Check your flexible savings account (FSA).
The government only permits a $500 annual rollover in an FSA; any excess funds disappear if unused by the end of the year. If you have extra money in your FSA, you may want to schedule necessary medical or dental procedures before the end of the year.

Check your health savings account (HSA).
HSA funds don’t disappear at the end of each year like with an FSA; however, many with few medical needs discover money accumulating in their HSAs much faster than they are using it, which is a good thing.  Consider increasing contributions as this is the only savings option where both contributions and distributions for health related purposes are tax free. 

Consider contributions to a 529 plan to fund your children’s/grandchildren’s education.
529 Plans allow for you to make contributions to a tax-free account that may be used to pay for qualifying secondary education expenses. (Investors should consider investment objectives, risks, charges and expenses associated with 529 plans before using them. Information about 

How money affects couples

It is no secret that money is a hot-button issue for most couples. Discussing finances can be uncomfortable, and some couples may avoid these conversations altogether. Financial issues may also cause some to avoid marriage entirely as individuals may be worried about sharing debts and assets or justifying their ingrained spending habits to each other. 

Whether you are recently married, celebrating an anniversary, or simply thinking about taking the next step in your romantic (and financial) life, consider these suggestions to the common financial challenges that most couples face.

If you marry your financial opposite
While most people say they want to find a mate that has similar spending habits to their own, what we want and what we choose may be vastly different. Some research suggests that when it comes to spenders and savers, opposites attract. This could be attributed to the fact that we sometimes seek out those who have opposite characteristics of what we find unappealing about ourselves. Regardless of the reason, if you find yourself a spender married to a saver, it can quickly lead to conflict.

On a positive note, compromising on personal spending habits can lead to healthy, moderate spending habits as a couple. By setting common spending goals together and establishing a system for working toward those goals, you can focus on something beyond the everyday sacrifices or splurges you try to avoid. The important thing is to set a clear budget that keeps both of you accountable to something other than each other.

If one of you makes more money 
It would be rare to meet a couple who made the same amount of money; chances are, either you or your spouse are pulling in the larger income. Whether the discrepancy is small or large, a difference in pay could cause tensions in how money is saved, spent, and earned.

It is important to remember, however, that whether you are the higher earning spouse or not, you both ultimately share responsibility for your family. 
Your importance to your family and the role you play in your loved ones’ lives is not completely tethered to your paycheck.

If you enter marriage with a hefty combined debt 
For Millennials, this is becoming more and more common. According to a Federal Reserve Report, approximately 40 percent of adults under the age of 30 have student loan debt, averaging $32,731 per borrower. That means that Millennials may be starting their marriages with about $65,000 in debt, and with the average cost of a wedding exceeding $35,000 in 2016, getting married may put you even further in the hole. 

Unfortunately, this debt burden may be scaring Millennials off from marriage altogether. According to a 2013 survey by the American Student Assistance, 29 percent of Millennials said they have postponed marriage to deal with their student debt. Conversations about debt may range from whether you will pay off your debt separately or together to how much should be spent on a fancy ceremony or new home. By establishing “debt goals,” you can make sure both you and your future spouse are on the same page and that you start your life together with a plan to reduce your loans in the future. 

If your marriage is the victim of financial infidelity
One in three adults who have combined their finances in a relationship admitted to lying about a financial issue, according to the National Endowment for Financial Education. 
While lying about money may be relatively common, these “little” money lies truly do matter; 76 percent of those who lied about a financial issue said that it affected their relationship. To avoid letting financial infidelity get the best of your relationship, it is important to talk with your spouse about what each of you considers financial infidelity. Something that one of you sees as a minor financial setback may sound like a financial disaster to the other. Establishing financial thresholds from the beginning can keep you both aligned on budgeting goals and foster better transparency when setbacks do occur.

If you are reluctant to combine finances 
If your spouse does not want to combine your finances right after your wedding, it may make you feel like they do not trust you. Try to remember that there is no unilateral approach to finances, and there may be practical reasons for keeping your finances separated. If this is the case, one option is to have both joint and separate accounts until you find out which works better in your marriage. If you are hesitant to merge finances, you may find comfort in the fact that there are certain aspects of your financial life that will not merge when you get married. For example, your credit report is yours and yours alone (although if you apply for a home loan or a joint account, both of your scores will be considered).

The most important thing to realize is that disagreements over money are often manifestations of deeper communication struggles. Money represents complex feelings for a lot of people — feelings about power, trust, or self-esteem that may be masked in a fight over your shopping budget for the month. Just recognizing which of these common issues may be causing friction is a key first step in resolving these common interpersonal challenges. The positives of transparent financial communication can impact far more than just your new joint checking account.

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