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Hold a Financial “State of the Union” with Your Partner

By: Jordan Sowhangar, Certified Financial Planner, VP and Wealth Advisor, Girard, a Univest Wealth Management Division

Navigating and managing finances can be difficult and becomes even more challenging as you begin to share major life events with a significant other. When planning the future with your partner, finances should be a top priority. But how do you approach this tricky and potentially uncomfortable discussion?

I suggest that couples hold a financial “State of the Union” meeting. Doing this at the beginning of the year is a good start, but I also suggest this is not a once and done discussion. Create a frequent, predetermined timetable that works for you to discuss finances (weekly, monthly, quarterly, etc.). Start off by being upfront and transparent about each of your respective financial situations as well as being realistic with your expectations for the future. Work together to create short-, mid- and long-term goals to help you and your partner stay on track for the future.

Address immediate goals

Short-term goals are things you want to achieve soon. For example, if either person has debt, paying it off should be at the top of the list. It’s important to get on the same page and consider consolidating or refinancing that debt. Maybe you want to get married or buy a house in the next couple years – these are significant financial events, so you need to plan in advance. If you’re having a traditional wedding, how much are you willing to spend? How will the wedding be paid for? Buying a house takes a lot of consideration and planning. Discuss what you’re both looking for in terms of size and location to determine how much you will need for a down payment and how long it will take to save. Talking about these major life events sooner than later will allow you to ensure you have the same expectations and help to determine a budget to achieve your financial goals as a couple.

Talk about lifetime goals

After discussing the short-term, it’s equally critical to align on mid- to long-term goals. If you’re planning to have a family together, have you talked about how many children you want? Planning for a small or large family can mean a big difference in finances. Be transparent about your family expectations as well as priorities for raising your children. Will you both continue to work? What is the cost of daycare? Will your kids go to public or private school? Will you leverage a 529 plan to save for college?

When thinking about long-term goals, it is important to realize that now is the time to start saving. Retirement may seem like it is a lifetime away, but the power of compound interest is in your favor the earlier you start to save. Are you each contributing to a 401(k) or IRA? Do you know how your money is being invested? While there is a longer time horizon to plan for these things, getting an early start will pay dividends.

Having regularly planned discussions about finances will help to normalize these conversations and create a united front so that money is not a taboo topic. Then, when difficult or unexpected expenses or issues pop up, you already have an open dialogue that will help to navigate potential financial hurdles. Discussing the future and being aligned on how to achieve goals can save a lot of time and planning in the future. If you’re looking for guidance or assistance to meet your financial goals, the advisors at Girard are here to help. Contact us to have a conversation about the plan for your financial future.

 

This article is for general informational purposes only and is not intended to provide legal, tax, accounting or financial advice. The information in this article, and any opinions expressed therein, do not constitute a recommendation or an offer to buy or sell any security or financial instrument. Viewers should consult with their financial and/or legal professionals before making any financial decisions.

Girard is a marketing name used by Univest Financial Corporation to provide (1) investment and wealth management, fiduciary services and trust services through its subsidiary Univest Bank and Trust Co., (2) specific fiduciary and investment advisory services through Girard Advisory Services, LLC (3) securities products, insurance products and brokerage services through Girard Investment Services, LLC, a registered broker-dealer and member of FINRA and SIPC, and a licensed insurance agency, and (4) investment management and related products and services for Pennsylvania municipal entities through Girard Pension Services, LLC. Investment products and services are not FDIC insured, not a bank deposit, not bank guaranteed, not insured by any federal government agency and are subject to risks, including possible loss of any principal amount invested.