FINANCE
Merging Your Money When You Marry
Getting married is exciting, but it brings many challenges. One such challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future.
Discuss your financial goals
The first step in mapping out your financial future together is to discuss your financial goals. Start by making a list of your short-term goals (e.g., paying off wedding debt, new car, vacation) and long-term goals (e.g., having children, your children's college education, retirement). Then, determine which goals are most important to you. Once you've identified the goals that are a priority, you can focus your energy on achieving them.
Prepare a budget
Next, you should prepare a budget that lists all of your income and expenses over a certain time period (e.g., monthly, annually). You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills. If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that both of you understand. And remember to keep your records in a joint filing system so that both of you can easily locate important documents.
Begin by listing your sources of income (e.g., salaries and wages, interest, dividends). Then, list your expenses (it may be helpful to review several months of entries in your checkbook and credit card bills). Add them up and compare the two totals. Hopefully, you get a positive number, meaning that you spend less than you earn. If not, review your expenses and see where you can cut down on your spending.
Bank accounts – separate or joint?
At some point, you and your spouse will have to decide whether to combine your bank accounts or keep them separate. Maintaining a joint account does have advantages, such as easier record keeping and lower maintenance fees. However, it's sometimes more difficult to keep track of how much money is in a joint account when two individuals have access to it. Of course, you could avoid this problem by making sure that you tell each other every time you write a check or withdraw funds from the account. Or, you could always decide to maintain separate accounts.
Credit cards
If you're thinking about adding your name to your spouse's credit card accounts, think again. When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other.
If you or your spouse does not qualify for a card because of poor credit, and you are willing to give your spouse account privileges anyway, you can make your spouse an authorized user of your credit card. An authorized user is not a joint cardholder and is therefore not liable for any amounts charged to the account. Also, the account activity won't show up on the authorized user's credit record. But remember, you remain responsible for the account.
Insurance
If you and your spouse have separate health insurance coverage, you'll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate. For example, if your spouse's health plan has a higher deductible and/or co-payments or fewer benefits than those offered by your plan, he or she may want to join your health plan instead. You'll also want to compare the rate for one family plan against the cost of two single plans. It's a good idea to examine your auto insurance coverage, too. If you and your spouse own separate cars, you may have different auto insurance carriers. Consider pooling your auto insurance policies with one company; many insurance companies will give you a discount if you insure more than one car with them. If one of you has a poor driving record, however, make sure that changing companies won't mean paying a higher premium.
Employer-sponsored retirement plans
If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan's characteristics. Review each plan together carefully and determine which plan provides the best benefits. If you can afford it, you should each participate to the maximum in your own plan. If your current cash flow is limited, you can make one plan the focus of your retirement strategy. Here are some helpful tips:
- If both plans match contributions, determine which plan offers the best match and take full advantage of it
- Compare the vesting schedules for the employer's matching contributions;
- Compare the investment options offered by each plan -- the more options you have, the more likely you are to find an investment mix that suits your needs;
- Find out whether the plans offer loans -- if you plan to use any of your contributions for certain expenses (e.g., your children's college education, a down payment on a house), you may want to participate in the plan that has a loan provision.
IMPORTANT DISCLOSURES
Securities and Investment Advisory services offered through SagePoint Financial, Inc., member FINRA/SIPC and a registered investment advisor. Fixed and/or Traditional Insurance Services may be offered through Capital Insurance & Asset Protection LLC, which is not affiliated with SagePoint Financial or registered as a broker-dealer or investment advisor.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
Haren Mehta, managing partner of Capital Insurance & Asset Protection in Tampa, can be reached at (813) 679-5204 or email [email protected]
BUSINESS BUZZ
Do Less to Achieve More
As a Process Engineer, I have been tasked many times to “do more with less” by providing consistency and precision as well as standardization, thus improving upon productivity. However, I believe today’s approach should be different.
Options are endless now with new technology and different ways to accomplish the same work effort. As such, it is easy to select the wrong approach.
Have you ever started a task without being able to finish the one you were already currently working on? You end up feeling as if you haven’t done enough or that you should have done more. Anxiety takes over. You end the day not satisfied with your work and, chances are, you, in fact, are not giving it your full potential. That will likely lead to you making poor decisions and being less productive.
You’re not alone
You and I are certainly not the only ones who feel like that as an example, let’s look at Facebook’s Mark Zuckerberg who wears the same style of clothing every day. He believes that starting the day without wasting that kind of energy usually associated with choosing one’s daily fashion trend helps save energy for things that are important. Have you seen the parallel between him and other successful people such as Bill Gates and Warren Buffet? To get to their level of success, they were certainly faced at one point in their lives with prioritization. Prioritizing implies making the right choices to achieve more when faced with a lot to do. But how do you do this?
‘The right approach’
You don’t need to be as busy as these people to understand and implement the key idea behind doing less to achieve more. Your brain is a muscle that you are unconsciously using all the time. You usually wake up fully rested (I hope!) and, as long as your day ends up being, the more tired you will feel. Taking things off your to-do list can be a hard decision as, these days, we already tend to do only what we value as important. However, it’s certainly worth trying to push the envelope a little harder.
“Writing down all I had to do for the week helped me realize I was re-doing unnecessary tasks. So, I started focusing on what was actually urgent. Months later I now realize my productivity has improved because I’m able to focus much more on what I’m working on”, says Kamlesh Darji, executive director, TiE Tampa Bay.
New technology plays a major role in all that. You can either use your phone to read a book or scroll down social media apps for hours and hours while you’re standing in line, for example. A study by Statistic Brain and cited by Microsoft concluded that our average concentration time has fallen to 8 seconds from 12, which was recorded in the 2000s. That is less than the average attention span of a goldfish, which is 9 seconds.
“Sometimes I catch myself staring at my phone without realizing the reason I’m going through my feed on Facebook or LinkedIn. It is just automatic. When I’m bored, that’s what I do. My boredom is constantly increasing my screen time,” says Darji.
How would you improve?
Start by not multitasking. I know it might get harder with dopamine hits we have to constantly deal with our new gadgets. However, when you actually try to do more at once you will likely deliver less. That’s not an intelligent way of wasting your energy.
Take breaks between things you have to do and don’t be afraid of napping throughout the day. In fact, a study by Quartz shows that employees are more productive when taking a 15-minute break at least every two hours.
Last but not least, remember to be selective of your daily tasks. Before you decide what you’ll do, determining the outcomes might be helpful. In that way, prioritizing can become easier.
Always keep in mind you are not a superhero. Your “doing less to achieve more” is translating the approach into a larger and consistent value stream that you can deliver upon in our volatile, uncertain, complex world. Remember… The plans of the diligent lead to profit as surely as haste leads to poverty.
Research cited
https://www.statisticbrain.com/attention-span-statistics/ (Attention Span)
https://qz.com/722661/neuroscientists-say-multitasking-literally-drains-the-energy-reserves-of-your-brain/ (Productivity by taking breaks every 2 hours)
Dr. Karyn Mathura-Arthur is an agile implementation leader with experience in Operational Excellence, Continuous Process Improvement, Business Transformation, Process Engineering and Organizational Change Management across multiple industries (banking, insurance, healthcare, telecom, government, retail, etc.). For comments and suggestions, email [email protected]