Wealth Management Blog

Posts published in February 2019

Love & Money: Couples, Are You Managing Finances Equally?

By JJ Burns

February 14, 2019

Maintaining a successful long-term relationship, and continuing to thrive over the long haul, is a team effort. Both partners have to be all in, both emotionally and logistically. This goes beyond divvying up household duties and co-parenting: one responsibility that's easy to forget about is balancing love and money by managing your joint finances.

There is no ‘best way’ for couples to manage their money—it depends on what works for you and your significant other. Some may feel most comfortable merging all their funds into joint checking and savings accounts, while others prefer the autonomy of separate debit and credit cards. The truth is that both approaches can work, but no matter the option you choose to use, some financial details are indeed intertwined when you're a married couple.

Commingling Your Credit

When newlyweds say "I do," they're uniting more than just their families; their debt also comes under one new umbrella. In other words, your credit score no longer stands alone. Whether you're applying for a mortgage, an auto loan or any other type of financing, lenders will look at your overall financial health, which includes your spouse's credit score. Having the money talk with your partner doesn't have to be complicated. If you haven't already done so, sit down together and put your credit history and current debts on the table. This way you're both on the same page. And if there's any credit repair to be done, you can make a plan for tackling it together.

Learning to Budget Together

An effective budget is really nothing more than a financial game plan that both partners create together. Lead with laying out your joint income, followed by the monthly expenses you have both together and separately. For instance, your mortgage or rent payment would be a joint expense, while your weekly happy hour date with your best friend may be considered an individual spend.

Once you see everything in black and white, communicate openly and honestly to come up with a monthly budgeting plan that works best for the two of you. Some couples may prefer separate checking accounts but joint savings accounts; or you might like the idea of using your spouse's income to cover housing expenses while directing yours to a checking account designated for other bills. At the end of the day, the best option is up to you, but the point is that ironing out the details should be a joint activity—not something that one partner decides and then dictates to the other. Financial knowledge is the foundation of financial empowerment, so no one should be in the dark here.

Planning for the Future as a Team

Equally managing your money also comes down to talking openly about your individual financial goals. Your spouse may be dreaming of traveling the world after retirement, or maybe you've both got your sights set on saving a down payment for a new home. Communicate freely about your big-picture dreams, then strategize as a team about how you'll get there. Building a reliable nest egg that will see you both through retirement doesn't happen overnight. Instead, it requires getting on the same page as your partner early on so that you can begin taking steps to get there—and, hopefully with as little stress as possible.

Whether it's coming up with an investment strategy, a debt payoff plan or a monthly budgeting approach, the most important thing is that you are doing it together. If one partner doesn't have a strong foothold in their finances, what will happen if he or she comes up against an unexpected death or divorce down the road? In the blink of an eye, they may be left to manage their finances on their own.

If making an effective plan feels like tricky terrain, a CFP® professional can help you and your partner clarify your goals and get on the right track together. Communication is key. From there, it's about managing your money as a team.

The Ins and Outs of Retiring Abroad

By JJ Burns

February 6, 2019

Your 60s are a unique time. You're on the home stretch of your professional life, your kids are likely grown, and in the back of your head, you're probably asking yourself what it is you want out of your retirement. But in the run-up to your golden years, finding time to catch your breath and really dive deep into the big questions isn't always easy. Work, family and social obligations have a way of keeping us perpetually busy—giving us the perfect excuse to put off retirement planning.

We don't have to tell you that time goes fast, and if you aren't prepared, retirement could very well sneak up on you. The good news here is that a little planning can go a very long way when it comes to crafting the retirement of your dreams. Of course, it all begins with one very important question: What do you really want to do once you retire?

What Does Retirement Mean to You?

This is a very personal question. For some, it may mean finally embracing a slower lifestyle where you have the time to dig into your hobbies and do as you please. For others, this stage of life is more about exploring new adventures and finally experiencing bucket-list dreams. Whether you prefer to take up rock climbing, big game fishing or work on your garden, being a happy, fulfilled retiree depends heavily on one important factor—planning ahead. 

It all begins, of course, with you. Take a minute for yourself, close your eyes, and envision your ideal retirement scenario. What does it look like? What is it that's going to feed your sense of fulfillment and emotional well-being? These are big questions, so really settle into this exercise.

For more and more people, retiring abroad has been a game changer. There's no shortage of beautiful locales that boast inexpensive, quality health care and low housing costs. Put those things together and it's easy to see why a whopping 3.3 million Americans are skipping Florida and opting for an out-of-the-box retirement destination instead.

How to Plan to Retire Abroad

In some ways, planning to retire abroad isn't all that different from retiring in your hometown. Both require getting a firm grasp on two ever-important factors: Your income and your expenses. The first one goes beyond your nest egg, covering everything from Social Security benefits to pensions to passive income streams like rental properties. This amount isn't really contingent on your location as the numbers will be the same whether you're in Fort Lauderdale or Belize.

It's your expenses that really tip the scales. Coming in on top is usually housing and health care, both of which can be significantly cheaper outside of the United States, depending on where you go. While the average American homeowner spends $1,443 per month on housing alone, expats can live a life of luxury in dreamy Granada, Spain—soaking up five-star cuisine, rich culture, and unbelievable natural beauty—for just $2,500 a month. Health care is also top notch.

So how can Baby Boomers get there? The journey begins with having a candid conversation with an experienced wealth advisor who understands your values, goals and financial position. Together, you can craft a plan that's tailored to you, and then begin taking steps to get there. As the old saying goes: Inch by inch, life's a cinch.

In other words, the best time to start making a roadmap for retirement is always now. This is especially true for folks looking to retire abroad or live in multiple countries during retirement. Planning ahead means thinking about what you'll do with your stateside properties, how an expat lifestyle will affect your taxes, and zeroing in on the destinations that tug at your heart the most.

After working your whole life, retirement is an opportunity to live a life that's in alignment with your greatest desires. The problem is that it's dangerously easy for the busyness of everyday life to derail our efforts to clarify those desires and bring them to life. At JJ Burns & Company, helping people achieve the retirement of their dreams is perhaps the biggest perk of the job—a little bit of forethought and accountability is all it takes.