Financial tension can create dramatic rifts within families. It’s unfortunate, but most people have a situation or secondhand story to refer to when talking about how finances got in the way of otherwise loving relationships. To alleviate or eliminate this tension, we can be proactive about our financial plans and communicate openly with our families. Here are five tips to help you create financial harmony at home.
1. Take a Step Back
Before you can take action, it’s essential to take a step back and look at your finances objectively—as objectively as possible, that is. Try removing the emotion from the situation and see where you stand. How much debt do you have? How much are your assets worth? Once you have a clear picture of your financial standing, you can begin to identify potential problem areas that may cause tension.
This step is important to do on your own and then with your partner, or maybe your children or other family members—whomever is directly involved with your finances, or may be down the line. Having everything out in the open is an excellent place to start when you’re opening communication channels to begin healing financial worry and stress.
2. Ask Yourself the Difficult Questions
This step is uncomfortable, but it’s crucial to understand where the issues are coming from. Do you or your partner have a habit of overspending? Is debt weighing you down? Are you preparing for retirement? Dig deep and form a better understanding of where your financial stress begins. It’s only when you know how you got there that you will be able to make a plan to move toward a better future.
3. Create a Solid, Sensible Financial Plan
As you take a step toward removing the financial stress and tension in your home, you must create a realistic financial plan. You may find it most motivating to set personal goals with your money. Be sure to include your family in these goals! Maybe it’s paying off debt, saving for college tuition or a family vacation, or buying a house or car. However you motivate yourself, this goal will give you solid numbers and give you something to work toward.
Once you know what you’re working for, even if it’s simply less financial stress, begin building your plan. Focus on paying off debt, building your savings, investing in your retirement, and placing your money on a path to work for you, not against you. Every dollar that comes into your house has a purpose; it’s up to you to find what that purpose is and to work together with your family to be on the same page about your collective financial goals and vision.
4. Communicate with Your Family
Many money arguments stem from poor communication within families. Don’t make money a taboo topic in your house, and let your family members know that it’s okay to discuss financial stressors and goals because together you can make a plan. Especially within couples, speak openly about your money mindset. This doesn’t just include your habits, but also how your family handled money when you were young, how you think about it now, and what you’re working toward.
5. Create an Air-Tight Estate Plan
It’s uncomfortable to discuss estate plans at times because it implies that there will be a time when you aren’t around; however, think of it this way: you’re saving your loved ones stress and worry in the future, protecting them from further heartache. Arguments among family members about money after someone close has passed is all too common. With a solid estate plan, you can maintain control over your finances even once you are no longer able. Ensure that your assets are distributed as you would like for them to be and that your family members aren’t worried about finances.
Reduce financial worry by planning a financial strategy with your financial planner. Are you ready to get started? Contact us today to schedule a consultation.