Birds are chirping, flowers are blooming…Spring is in the air! You know what that means? Wedding season! For all of our newly married readers…congrats! You met your soulmate and tied the knot. You made it through the engagement, wedding planning, house or apartment shopping, possibly moving, unpacking, the excitement (and fatigue!) of the wedding day, possibly the travel of the honeymoon…and now you’re landed in real life. Swept away from the daily count-down to your wedding, you’re now engulfed in paperwork to change your name, hectic work days and learning to merge your life with your partner. It’s a process, but the journey is one of the coolest and most amazing ones you’ll take. However, it’s not without bumps along the way.
Did you know that according to the American Psychological Association, between 40-50% of marriages end in divorce? According to a 2009 Centers for Disease Control and Prevention study, approximately 41% of first marriages end in divorce, 60% of second marriages end in divorce and 73% of third marriages end in divorce. CNBC did a study in 2015 that related that approximately 35% of divorcees reported that they divorced because of money issues. Scary, huh?
As a blissful newlywed (or a veteran married trooper who has figured out the secret to a happy marriage and are still “newlywed in love”), you may be wondering why we are bringing up this topic of divorce and the statistics that a high percentage of people in circles you live in will get a divorce at some point. Why would we want to bring the grim-reaper of reality to your happy new life? Because one of the largest causes of divorce can be mitigated with awareness and team work: financial awareness and management.
No, you can’t always control the amount of money coming into your household. Jobs are lost, promotions don’t come through, and bills arrive on a consistent basis. But you can create a strong financial protection plan together to help you weather the ups and downs that come.
As a full-service insurance brokerage, the CHOICE Team has experience working with families in setting up their entire protection plan. A large part of creating a protection plan for your future is having your financial plan in place. As we have worked with clients over the years, we have compiled several key tips to help people get started off right in creating their protection plan.
1- ) Sit down, remove all distractions and talk with your partner. To get where you want to be, you have to know where you are starting. Grab a legal pad, jot down any debits that you both currently have. Make a list of monthly expenses. Make a list of all monthly income. Make a list of any investments, retirement accounts or other savings. This should give you a snap shot of where you are starting. Next, in this meeting, talk about what you both want to accomplish. Do you want to be debt free? Do you want to pay off student loans? Do you have a dollar amount you’d like to be earning as a household by a set time? Do you want to buy a new car or take a luxury vacation? Write it down along with the timeline that you want to accomplish these goals in. The surest way to miss the target is to not be aiming at one.
2-) Finance is a family word. Budgeting, retirement, insurance policies, money management, paying off debt, taking on a second job, job changes…all are a family conversation. You and your partner need to bite the bullet and be on the same page. You may decide that it works better for your dynamics to have one person handling the day-to-day functions of finances, but there needs to be a periodic, reoccurring meeting together so both of you are aware of what is coming in, what is going out, and where you are in your financial plan. Make it a set time on your calendar. Sit down, grab your note pads and calculator, and see where you are.
3-) Make a budget…and stick with it. Rent/ mortgage, groceries, utilities, phone bills, cable, car payments, student loans, entertainment, etc. all need to be tracked. Once you know what your bills are each month, you know how much you need to be bringing in each month to cover those expenses. For example, if your monthly expenses are $7,000, then you know at a glance, that to simply break even with your expenses each month, $7,000 will need to be earning (not accounting for savings or retirement contributions). If you are looking at your legal pad thinking, “there is no way I can bring in enough each month to cover these expenses, much less save or pay off debt!” Good news? You have several options.
First, you can review your current expenses and decide what areas you want to change to reduce expenses. This could mean calling your cable company and asking for a loyalty discount, reviewing your insurance for savings, cooking at home a few days a week, etc. Decreasing your out-going expenses helps free up cash.
Second, you can look at options to increase your income. Would an extra $500 per month turbo-boost your debit pay-off or help cover the luxury upgrade on the vacation you’re planning? Figure out a way to make it happen. Does your job offer over-time? Can you freelance on the side? Can you turn a hobby into an income source?
4-) Contribute to retirement. Retirement may seem like a long way off. But it’s going to be even farther away if you don’t plan for it (as in…you might not get to retire). It is never too early to start contributing to retirement. This needs to be a line item in your family budget. If you are earning together as a household $184,000 or less per year, you are able to contribute a max of $5,500 per person per year to a ROTH IRA. You don’t have to max out your contributions each year (although that would be ideal). $11,000 to contribute each year for a couple is a lot of money. I get that. Start where you can. For example: $500 contributed per person ($1,000/yr.) contributed breaks down to $83.33/month. $1,000 per person per year breaks down to $166.66/month. There are tons of options that allow you to automatically transfer a set amount each month to your retirement account. Work with what you can do, but keep in mind that compound interest works strongly in your favor the younger you start contributing.
These are just a few fundamental basics can help get you started. If you need planning help or have questions, we are happy to be a resource. Do you need input on investments? Advice on how to pick your retirement contribution vehicle? Do you need insight on setting up your Life Insurance protection plan? We can help! Call The Choice Insurance Financial Team today.
Again, congratulations on your new adventure together! We look forward to helping you build your financial plan!
To get the tailored policy coverage that you need for your home, valuables, auto, LIFE, or business, call The CHOICE Insurance Team today at 757-416-5100 and ask for a free, comprehensive review. Give us a call today!
All the Best,
The CHOICE Team
In 2008 Choice Insurance Agency was created out of the former Realty Consultants Insurance Agency founded in 1980 by George Ayers Capt. USN Ret. Since 2008 the Choice Insurance Agency has more than tripled in size and is continue on a track of rapid growth. The Choice Insurance Agency focuses on four areas of expertise: Private Client Group, Coastal Coverage, Senior Programs and Commercial/Business Insurance. Our business model has allowed us to expand into all of the states on the Eastern Seaboard from New York to Florida including Pennsylvania and DC to better serve our ever-growing client base. As an Insurance brokerage stationed in Hampton Roads with access to well over 40+ insurance carriers, the Choice Insurance Agency is able to shop for the best rates, cover those picky coastal zones and create a tailored plan to fit your insurance needs. The Choice Insurance Agency. Call us today and see why we are the top “CHOICE” in Hampton Roads.