How to Set Financial Goals as a Couple

9 Steps to Setting Family Financial Goals together As a Couple

It is important to set goals that you can work on as a couple. Being on the same page with your joint finances helps to strengthen your money situation and your relationship. As a follow up to How to Talk about Money with Your Spouse, we are taking things to the next level: Setting your family financial goals.

“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” -Pablo Picasso

1. Organize your goals by Time frame

I like to break goals into short, mid and long range time frames:

Short term goals: < 1 year

Mid term goals: 1 - 5 years

Long term goals: 10 - 20 years

2. What are Short term goals?

What is going on in your life, that needs to be immediately addressed? Maybe you have been putting off a house project, but you don’t know how to get started. Maybe you want to plan a family vacation, for some good quality time or you need to you have money sitting in an 401k from your last job and you need to roll it over but your not quite sure what to do with it.

Short term goals are generally fairly easy to envision. You know your current self, so you know what you need to do. However, writing down your short term goals and talking about them, will help in actually getting them done.

3. Mid term goals

Mid term goals tend to be a bit tougher than short term goals, because you know what they are, but you know it is going to take more time and effort to get there. You will need to monitor your progress and you will need a plan. Mid term goals are things like: Planning to start a family, paying down debt, saving up for a down payment on a house or switching careers in the next few years.

4. Long term goals

“A goal is a dream with a deadline.”

-Napoleon Hill

While mid term goals are difficult because they require work, long term goals are more challenging because they seem ephemeral, variables can change as time passes and they are difficult to envision. You may not know what really matters to you, yet. You may foresee changes in the future that could impact your goals. Or maybe you just can’t imagine yourself in 10 years. Long term goals require some real thinking, discussion and envisioning. You may need to dig in and dream a little!!

5. Brainstorm, then compare notes

Now we have defined what we mean by the different time frames for goals. How do you actually have a discussion around your shared financial goals? First, realize that this discussion may prove to be harder than you thought. For example, you may find that your goals are not aligned (at all).

I am a fan of the sticky note method: Using sticky notes, spend 5 minutes separately jotting down as many short term goals as possible. Write it all down, even the absurd … brainstorming is not a time to “cull the herd”, dream a little and have fun!! Then come together and share your sets. As a team, now is the time to really start to evaluate what makes sense. It is also a time to stop and appreciate the unique perspective of your sweetheart. DON’T go about bludgeoning, like baby seals, your sweetheart’s ideas. Be open minded. Then iterate through mid and long term goals.

6. Don’t jump into solutioNing!!

The point of the discussion is to create a set of goals. A plan to accomplish those goals, should come after the set is created. Too often, a goal may be jettisoned early in the process because it may seem hard, or because there is no clear path to achieving it. Don’t let that hinder you. Goals are meant to be hard. They will force you to plan and work.

7. Prioritize

“Most people overestimate what they can accomplish in a year, and underestimate what they can do in 10!”

-Bill Gates

It’s time to determine if the entire set is reasonable. If you believe you can reliably reach all of your goals, it’s possible you were not audacious enough. I say live a little, be bold!! If on the other hand, you have gone completely nuts, now is the time to start getting realistic. Start by deciding how much you have to fund your goals. Then break up the funding as a percentage of short/mid/long term goals. A good recommendation is: 25% - short, 35% - mid, 40% long term. Now is the time to edit, get rid of things that you can’t fund. Or deprioritize them to a future discussion. My mantra in these discussion is: if I can’t prioritize them now, maybe they are not really worth prioritizing at all. This is where the planning really comes into play.

8. Share your goals with friends and family

Now that you have your set of goals, unpack them in front of friends, at dinner or over drinks. How do they feel having rolled them around in your mouth, are you still resolute in what you have? Did you get any good opinions? Additions? Good Ideas? Do you now have some accountability partners? Did you inspire your friends to have a similar discussion? Incorporate good ideas into your plan. But don’t necessarily allow someone to dissuade you from something important.

9. Rejoice!

You made it through the discussion. Having these crucial discussions with your sweetheart will fundamentally strengthen your relationship. Too many times, we hold back, in order to not offend or hurt our significant others. When you shared insights with your friends, did the two of you have to work together defending your aspirations? Having struggled through the discussion, will ultimately make your relationship stronger.

Please don’t worry if you hit some road blocks during the discussion, I am here to help. This is tough to navigate on your own. Sometimes the issue is in getting an achievable list. Sometimes the struggle is coming up with the plan to reach the goals. Let’s set up some time to talk!

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How to Talk About Money With Your Spouse - 11 Tips

Do you find sharing a glass of wine with your spouse is made more enjoyable when combined with a conversation about budgeting? When was the last time you two were out on a walk around the neighborhood and discussed the tax advantages of IRA’s?

If you find broaching finances with your spouse generally causes stress and tension in your relationship, you are not alone! Money is one of the most common reasons couples fight and even split up. Don’t worry, there’s hope. By being proactive and discussing your finances, even seemingly incompatible spender-saver couples can find common ground and live happily ever after.

Whether you are about to tie the knot, or you’ve been married for years, with a few strategies and tips, you can find peace and happiness to last through the years:

Some people search their whole lives

to find what
I found in you.

Working together on your goals is a gift.

1. Begin by setting expectations. Starting simply by saying “I am interested in talking about our finances. It doesn’t have to be now, but lets make some time in the next week.” Then get it on the family calendar.

2. Take it slow. If you don’t know, a good starting place would be to talk about your individual views on money. Many times I find a client’s perspective on money comes directly from their childhood and parent’s relationship to money (sometimes parallel and sometimes opposite). Understanding where someone is coming from, will help you navigate your conversations moving forward.

3. Start out with an easy topic. A good finance starter conversation, is discussing short-term goals, such as a birthday gift or a summer trip.

4. Follow up your short-term “goal conversation” by discussing “how” to reach that goal. Even if it seems easy to pay for it directly out of pocket, discuss how budgeting could play into it. Saving in a special account, each pay check is a simple way to begin.

5. Sometimes understanding a couples role in the relationship is an important topic. Regardless of who makes more money, I find that one person generally “handles” the day-to-day finances. If that is case, make sure both sides regularly discuss, both how much money is coming into the accounts, and the money going out of the accounts.

6. Make sure that the spending side of the equation is distributed in some sort of equitable situation. In my family, the bills are distributed based on percentage of income, while the mortgage is paid evenly between us. Make sure and discuss.

7. Talk about the difference between “monthly bills” and “discretionary spending”. Bills you must pay each month: electricity, insurance and mortgage. Discretionary spending, you can control with choices: grocery shopping, sporting events, clothing, eating out.

8. Discuss what’s important to you and your long-term goals. Having a clear understanding of your shared long-term goals, make all of the short-term decisions easy. The problem is, most people forget about the long-term when making day-to-day short-term decisions. Keep your eyes on both.

9. Set up a standard cadence to talk money and stick with it. Some meetings will be longer than others. But a ten minute weekly check-in is key to keeping you both updated and on track towards your short and long term goals.

10. During open enrollment each year, talk to each other about your respective plans. The key is to make sure that both parties are driving towards the same long-term goals. For example, if you are both working, both of you should be saving an equal(ish) amount in a 401k, disability insurance and FSA’s.

11. If you have followed along above, and you and your significant other are having healthy conversations, thats great!! It may be time to discuss things that are making each of you uncomfortable (CRAZY). You each should write out a list, of things to discuss, and take turns each week. Make sure that each of the conversations work towards mutual understanding, as well as reaching long-term goals.

If you find that having these conversations is still uncomfortable, or becoming unproductive. That is a key spot for a financial advisor to step in and help out. A financial advisor brings an objective view point that can help pave the path towards resolution. Find someone you will feel comfortable being candid and open about your financial wants, needs, goals and struggles. Here’s a list of questions to aid you in finding the right financial planner for you.

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Financial Checklist for Expectant Parents

Congratulations! You are having a baby!

Becoming a parent is one of life's biggest joys and responsibilities. Once you find out you are having a baby, life quickly becomes very busy with preparations and planning for your little one. Your calendar will become full with everything from scheduling medical tests to signing up for childbirth classes and picking out a car seat.

Preparation you can’t afford to avoid!

A topic that many expectant parents are reluctant to discuss with their close family, friends, professionals or even each other, is money! How in God’s name are you going to pay for another person to live in your house and eat your black olives and 12 month old Manchego?

The Cost of Having a Baby

The average child, in 2018, will cost, out of pocket, ~$3,500 to deliver … and they are not even home yet. And the cost of raising a child from birth to 18 years is somewhere in the neighborhood of $350,000! If you enjoy splurging on your kid, taking vacations, weekend trips, nice clothes and going out to eat, it can quickly add up to $700,000. Now, take a deep breath. By implementing a plan, there won’t be any need to stress over baby related finances.

Pre-Pregnancy Planning

If you can, get started when you decide to start a family.

Assess Your Car.

Is it safe, dependable and can it accommodate a baby? A baby doesn’t require a SUV or a minivan, a decent sized sedan will do. Every 3 years, my wife and I take turns getting a car. I like to drive them to ~160,000 miles. When “baby making” enters the family discussion, the next car purchased should take baby into consideration. (We bought a Subaru Outback 2 years before our first son was born).

Assess Your Living Situation.

Get into a housing situation that is not likely to change for 3 to 5 years. If you are renting, get something big enough to accommodate your growing family. If you have a house, make sure the location is family-friendly. If you don’t have a garage or car port, think about how you are going to feel dragging a car seat through a cold rain storm.

Have Fun with your Partner.

You may think that things are not going to change for y’all. THEY WILL. You won’t be going out for late night dinners. You won’t be catching a last minute flight down to Miami. You won’t be tailgating with your college friends on Saturday’s— or at least not very often. So enjoy your baby-free freedom while you still can. Jenn and I hit Costa Rica, Belize and Hawaii in the two years leading up to becoming parents.

Save.

I recommend $20,000. But do what you can, while having fun.

First Trimester

Mom-to-be may be experiencing some morning sickness and be worn out from her pregnancy, but you should still prioritize:

1. Start a budget for the coming 40 weeks. Plan on a weekly/monthly schedule, how you will draw down and distribute your cash.

2. Get a will drawn up by a trusted estate lawyer.

3. Complete any house projects (non-baby related), that you’ve been putting off.

4. Review your health insurance. It will be important to have a doctor in network, at a hospital you trust and close by. Reviewing your health coverage will give you an idea of your out of pocket costs. Also, you may determine after reviewing your coverage from a parent perspective, you may want to change providers or plan at your next open enrollment.

Second Trimester

By now, you should know if you are having a boy or girl — or maybe you’re keeping it a surprise. Either way, you can start nesting in earnest!

1. Set up the nursery. Buy the bed, changing table, nursing chair, paint the walls and decorate.

2. Determine your maternity and paternity leave. And then talk to your boss or Human Resources. If you work at a small business, the quicker they know what is coming, the better they can prepare.

3. Review your company’s paid leave benefits. If that’s not an option, look into Short Term Disability benefits. Short Term Disability can cover you for a percentage of your compensation. If you are a dad, take a long hard look at paternity leave. The difference in women’s and men’s pay in the work force these days is actually statistically related to “moms” -v- men. Women with no kids, earn just as much as men. A key to potentially solving this, is having dad take paternity leave. It is a complicated topic, but worth consideration.

4. Borrow and bargain shop. This is something I wish I did with my first son. We wanted all new, the latest and greatest for our little one. We spent a lot and didn’t realize how quickly the first year goes by and how quickly he would grow out of things. Reach out to your network of friends, family and Facebook and see who has baby gear they're willing to sell or give to you. Cribs, changing stations, strollers and clothes for you and baby are great items to borrow.

5. Set up baby registry. Make sure and ask for all of the things that you really want and/or need. Check out the online lists like Amazon’s Baby Registry. It offers almost everything, and is convenient and easy for family and friends that don’t live close by. Be thoughtful about compiling your list. And also be cognizant of the size of the shower, when setting your wish list.

6. Explore Child Care. Will one parent stay home? If not, tour day care facilities and/or interview nannies and ask friends for recommendations.

Third Trimester

1. Finalize Child Care. Make sure day care applications are complete and starting dates are set or get a commitment from your nanny.

2. Stock pile baby supplies. Be savvy, get to know prices and buy diapers, wipes, food, clothes when they go on sale.

3. Pack your Hospital Bag: At 36 or 37 weeks, pack your hospital bag and install your baby’s car seat, just in case you go into labor early. Here’s a great list of what to pack.

4. Schedule a newborn photoshoot (with an affordable photographer). You’ll treasure those photos forever. **Yes, that is my son in the top pic. Isn’t he cute?

5. FOCUS ON BABY!!

How a Financial Planner Can Help

Becoming a parent is both exhilarating and overwhelming. You want to provide your baby with a safe, secure and loving home. Having a sound financial plan can help you provide that security for your family:

• Estimating your medical costs

• Planning leave from your job

• Budgeting for your new arrival

• Estate planning - will or trust

• Life and Disability guidance

14 Questions to Ask a Financial Planner 

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14 Questions to Ask a Financial Advisor Before Investing

A Financial Advisor needs to be someone you can trust, you need speak candidly with them about your concerns, wants and needs. Asking these questions can help you decide if this person is a good match for you and your family.

1. Are you a fiduciary?

Yes. I am a fiduciary. From an SEC perspective, that means I list in my ADV form 2 how I get paid, the services I offer, and any conflicts of interest. Being a fiduciary means more than that to me: I put my clients interests ahead of my own. I work with trusted 3rd parties. I look for the best products for clients, taking into account quality, cost and timing. I don’t take any commission of any sort.

2. How do you get paid?

There are three ways I get paid:

1. Providing financial services on an ongoing basis. Monthly subscription of $125/month.

2. Creating a financial plan ($125/hour approximately 8-12 hrs).

3. 1% of assets under management

   For details on these offerings see Services.

3. What IS YOUR “all in” cost?

In addition to the services I outlined above, you would pay:

• If I am managing your accounts, you would pay $15.95 per trade through my custodian, SSG.

• Standard capital gains/losses on trades

• .04%/year on ETFs (that comes to 40c per $1000/year)

4. What sort of tools do you use for budgeting?

I have a spreadsheet that utilizes a range of custom formulas that makes itemizing expenses, income and savings simple and easy to understand . Additionally, I have a variety of software and tools that facilitate the financial planning process.

5. How Do you deal with security?

My clients security is my top priority and is integral to my business. All of our assets are protected by multiple sets of encryption. Online access to accounts are protected. I use 2- factor authentication when sharing cleint information. Any spreadsheet/worksheet that I use is protected with unique and secure passwords.

6. What are your qualifications?

I work with families in a range life stages. I earned an undergraduate degree in Industrial Engineering from GA Tech and an MBA from Ga State. I passed the series 65 exam.

7. How would our relationship work?

I believe the key to a mutually beneficial long-term relationship is through trust and context. With that context I can better provide useful advice. I believe that meeting 1 time per year is not nearly enough. Our meeting cadence will be determined by my client’s situation as well as the issues needing addressed. My clients call, email and text me as needed and I respond in a timely manner.

8. What is your investment philosophy?

The best long-term results are achieved through creating an asset allocation that is well diversified, that will meet your goals (given your risk profile) and requires continual contributions.

I am not a stock picker. My solutions are data-driven. Historical data shows that the vast majority of stock pickers are not capable of beating their respective indexes, and generally end up with higher administrative fees.

I use low cost Exchange Traded Funds (ETFs). I believe the future will look better than the past, and as such, the best companies in the world, as represented by ETFs, will continue to appreciate over the long-term. I do not worry about the daily variations of the market, which tends to be irrational in the short term.

9. What benchmarks do you use?

The S&P 500 and inflation.

10. Who is your custodian?

A custodian is a company that performs trades and holds your shares. Eg: eTrade, Schwab, Fidelity. The custodian I use is Shareholders Service Group (SSG). They use Pershing a subsidiary of The Bank of New York Mellon, the largest custodian in the world with over $27 trillion in assets under custody.

11. What asset allocation will you use?

The majority of a client’s allocation should be in stocks rather than bonds and cash. Historical data shows that bonds barely keep up with inflation. The key to your future is in purchasing power, which means your money needs to beat inflation.

12. Give me an example of a portfolio you’ve designed AND ANY THOUGHTS ON HOUSING.

Each portfolio I design is specific to the client and their current financial situation, goals and risk attitude. As an example, one family I work with wants to reach their financial goals early. They contribute regularly and are mentally unaffected by the short-term variability of the market. At a high level their portfolio consists of low cost ETFs in an S&P 500 tracker: 30%, Emerging Markets: 30%, Small Caps: 30%, Cash: 10%.

Any thoughts on selling the family home now, and either renting or buying a less pricey house: this comes down to the goals of the family. While its true that many family’s biggest monthly expense, largest asset and largest liability is their home, it’s also true that it is their highest utilized asset. If you live in a house, that fits the size of your family, has attributes that you appreciate and does not cause you undue financial hardship … why mess up a good thing? If that set of “if’s” you cannot answer in the affirmative, and you can find a house that better meets your family goals … well it may make sense to move. As in stocks, I am not a believer in trying to time the housing market. I have heard rumors of friends in Decatur who are considering selling now (at a perceived high), renting for 2 years until a drop, and then buying again. I think thats crazy talk, for at least a dozen reasons.

13. What are the tax implications of working with you?

If I am managing your assets, any transaction sales will have some sort of tax implication, through capital gains/losses. I limit the tax implications by limiting the # of transactions.

14. WHY FAMILIES? WHY PROFESSIONALS?

In my experience the complexities of families deserve an added set of professional eyes administering a solid plan. There are many moving parts to a family, that include the expenses of starting a family, all the way into paying for college and eventually estate planning. More voices from a family generally brings more perspectives, something a trained professional can aid in clarifying.

Professionals are people driven to be really good at job, hopefully a job they love. In order to drive to be the best, many professionals are forced to neglect certain aspects of their lives. I have seen too many extremely smart professionals who have neglected their finances to the detriment of the long-term success of their family. I believe that by relieving families of this variable, we are all working for the greater good.

THE NEXT STEP

If you’re ready to take the next step toward financial independence, I’m here to help. Working together we will develop a personalized financial plan based on your unique needs. Set up an initial consultation.

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3 Hacks to Stay Motivated

Planning for a long-term goal, while super important, feels remote for many people, check out my earlier post about meeting your future self. To stay motivated, I reward myself on a daily, monthly and yearly basis:

DAILY

A long-term health goal of mine is weighing in and maintaining a svelte 169 pounds. To get there I workout at Crossfit 2/week, play basketball and soccer 2/week, and practice intermittent fasting with an eating window between noon - 6pm. Meaning, I dont eat between the 6pm and noon the next day. Fasting helps me reach my weight goal, saves me lots of money and makes me realize I am tough enough not to constantly feed my urges. And it allows me to reward myself — when my eating window is open I treat myself to food I really like (thank you to the current ramen craze).

Monthly

One of my bedrock beliefs is “loving my friends and family.” It’s important to me that I have families come over to our house for Sunday Supper. I cook, the kids run around, and the adults mill about drinking wine, discussing football, the latest Netflix show and Decatur City Schools. For me, wine is a key element of Sunday Supper. I can’t deal with the uncertainty of randomly selecting bottles at the local wine shop. So each month, if I have met my business goals, I treat myself to 6 wines from Garagiste. Jon Rimmerman is the curator of Garagiste and he is all about value and honesty in wine making. I’m a big fan. With wine tucked away in the cellar, I am more likely to kick off the next Sunday Supper.

Yearly

Each month on payday, before we can spend it, we set aside a chunk of cash into a savings account for an awesome ski vacation and the kid’s sleep away camp. The ski trip gets us away from the daily grind, and allows us to team up against the mountain, working together and having a blast. Sending the boys away to summer camp serves two big goals for our family: 1. it teaches the boys independence and 2. it allows Jenn and I to connect and build on OUR relationship. We enjoy this without charging up a credit card by saving throughout the year.

Celebrate the baby steps

The bigger the the goal, the longer it will take to reach. You’ve got to reward yourself along the way to stay motivated. Enjoy life each day, but remember that the difference between a goal and a dream are the action steps you take.

Let’s talk about the hacks you use to keep yourself motivated through the year! A long-term plan is of minimal value, if you don’t have short-term games, that keep you motivated to play the long game. Schedule a quick chat today.

Big Bonus? Don't Ignore the Rainbow

I have been asked for suggestions on what to do with a nice fat bonus check (or a big pay day from a sales/legal win). It always depends on your particular situation. However, there are some high level things I would suggest thinking about. First, have a plan!! I would go into it with split among your goals, Eg: 20% - short term, 60% - mid/long term, 20% - fun.

Short term issues that alleviate worry:

1. Pay down any high interest debt - credit card, 2nd mortgage, school loans

2. Put new tires on your car

Short/mid term value that you can add to your family

1. Time to upgrade your 10 year old minivan?

2. Remodel the kids bathroom?

Mid/long term investment for your future self

1. Fund an IRA

2. Fund an investment account

3. Buy into a real estate deal

4. Fund your safety cash (3 months of family bills)

5. Fund the kids 529’s

Do something for your self! It’s a bonus, enjoy it.

1. Buy yourself something fancy

2. Buy a gift for your sweet heart

3. Go for a ridiculously expensive dinner/outing

4. Check off an item on your bucket list

5. Hop on a plane for a far away spot for a week

6. Put a down payment on a Tesla

The key points here are:

1. Take care of some short term issues, that keep you up at night.

2. Think about your future self … they will be knocking on your door soon

3. HAVE SOME FUN

Warning: Don’t let your “bonus” fund your life.

If you are counting on your bonus to pay your bills, or keep you afloat for the year … please, pretty please with a cherry on top, you need to reevaluate how you are allocating your monthly income. Use this next bonus check, to catch you up. And lets go ahead and set up a plan, moving forward, so that you are focusing your spending on the things that matter to you. And not throwing money at things that don’t. Schedule a quick call or coffee!!

The Financial Mistake You Don't Realize You Are Making?

I was talking with a family friend, who’s retired, about how she was managing her affairs. She felt confident that all was well. She and her husband had recently updated their will. I nodded with approval, as its always a wise move to have your will reevaluated every so often. I’m curious (nosy) and try to be helpful, so I asked her more questions. After I asked about her stock/bond/cash allocations, we moved on to insurance. I asked about long term care, in case circumstances changed and they needed assisted living. She got real quiet and then all of a sudden blew up in frustration …

“I didn’t think to ask about that but WHY DIDN’T THE LAWYER??!! I’m calling him tomorrow!”

It’s a common revelation to people I meet with: On your own, you’ve engaged with several specialists but don’t have a financial advisor with a holistic view of your entire financial health to make sure everything is covered. Similar to a primary care physician who sees you on a regular basis and advises when to see a trusted specialist. Or a systems architect in software, who understands how the myriad components of a system interact.

You may have someone for stocks and bonds, a medicare guru, an estate lawyer, a real estate lawyer and an insurance agent … but do you have anybody that has the overall holistic view of your plan, tying everything together? Someone who’s family’s future, is directly tied to your family’s future success?

At Chamberlain Financial Advisors, we assess all aspects of your situation, providing solid advice throughout. We are fee-only, meaning we don’t get commissions to sell you products. Where we need experts, I facilitate the conversation. The ultimate goal is your overall financial health.

Do you have an advocate with a holistic view of your family’s financial situation? Are you DIY’ing it, but don’t really understand all aspects of the plan? Set up some time with Josh. Let’s get fully healthy.