Financial discussions can be difficult – even when they’re with yourself! But they’re important, especially when blending your financial life with a partner.
How do you feel about money? What are your goals for the future? What obstacles are in your way? A conversation may surprise you. Maybe your financial goals aren’t what you thought they were. Maybe your partner is on a different page than you. Maybe your financial risk isn’t in line with your personal appetite for risk.
Answering a few questions can help lay the groundwork for your financial and retirement planning. As financial advisors in San Antonio, Texas, the team at PAX Financial Group often sees people follow financial plans that don’t actually lead to their financial goals but instead is a cookie-cutter layout focused on dreams that aren’t theirs.
At PAX Financial Group, we’ve come up with a list of important questions to help you (and your partner) determine your financial history, habits and goals, and therefore, create a plan that works for you.
If you’re unsure on how to get the conversation started, we can help.
Let’s talk! Schedule a no-strings-attached conversation with the team at PAX Financial Group.
1. What is your experience with money? What are your first financial memories as a child?
As financial advisors in San Antonio, Texas, we see in many families that history tends to repeat itself where finances are concerned. There is a very good chance that your financial beliefs and money habits were formed at an early age, when you experienced the ways in which your parents handled money and made financial decisions. By talking about those memories and attitudes, and how they’ve influenced you, you’ll get a window into your (and your partner’s) financial foundation.
Read our recent blog post: How Do You Really Feel About Money? Let’s Find Out.
2. What are your financial goals?
Is your financial goal to have enough to live comfortably, or is your dream to become a millionaire? Are you hoping to retire at a certain age? Leave something to next generation? Retire debt-free?
This question is meant to prompt you (and your partner) to think not only about your ideas for the future, but also about how you’ll achieve those goals. Where do you see yourself in 10, 20, 30 years? What will you be doing, what will you need? What can you do today that gets you closer to accomplishing your goals?
If you’re married, remember that you can have your own goals, as well as goals that you share with your partner. The key is knowing these goals and how they affect your bottom line.
3. What are your biggest financial concerns?
What’s your biggest fear when it comes to money? Running out? Not saving enough? Be honest about your anxieties and insecurities, and listen openly to your partners’, if applicable. Talking about your fears and why you have them is a good way to get your feelings out in the open and gives you an opportunity to work through them together. Read our recent blog post: Money and Marriage: 5 Tips for Making it Work.
4. What can you do to address your concerns?
Your fears may seem overwhelming, but there are likely some simple steps that can help you address them, such as staying on budget, establishing an emergency fund or paying off debt.Once you’ve shared the money worries that keep you up at night, you can discuss ways to soothe those fears and avoid your financial triggers. If you’re unsure, talk with your financial advisor. Financial planning is not a one-size-fits-all equation, so there may be tweaks to generalized tips that work better for you.
5. What are your financial needs?
Understanding the difference between a need and a want is crucial. You may need a car to get to and from work, food on the table, money to pay student loans, and a roof over your head. Write down your financial needs, and if you’re in a relationship, make note of what you have in common with your partner, and what you have separately. Are there any you disagree about?
6. What are your financial wants?
Financial wants are on the other end of the spectrum. You might want a new car to get to and from work, a swimming pool in the backyard or family vacations. Having wants doesn’t make you a selfish person, but it’s important to get them out in the open.
Again, if you’re in a relationship, which wants do you share with your partner? Is there one you object to? Why?
7. If applicable, what are your partner’s answers to the above questions, and how do you merge the two into one shared goal?
This can be a difficult question to answer.
Many couples we work with at PAX Financial Group combine their income and expenses into one merged account. If you decide to go this route, it’s important to be clear and honest about your expectations, especially with regard to those aforementioned financial needs and wants.
If you want help with this discussion, contact us! PAX Financial Group is here to help!
8. What are your plans for retirement?
When you close your eyes and dream of your Golden Years, what do you see? Where will you go? What will you do? What parts of your dreams are the same as your partner’s, and what are different? Will you be able to save enough to fulfill your dreams?
Remember when we said not all of your financial goals had to be identical? The same applies here. Not all of your retirement goals need to be the same. He can play golf, and she can garden – or she can play golf, and he can garden! The only thing you have to agree on is how to save for those goals and how to stick to a plan.
This recent blog post may help: What Does Your Dream Retirement Look Like?
9. What’s your financial risk tolerance?
As financial advisors in San Antonio, Texas for many years, we see many people surprised at their financial risk tolerance. It doesn’t always match your personal risk tolerance. Another common surprise for couples is that their partner’s risk tolerance is different than theirs. One might be more of a saver, while the other is more of a spender. The spender might also be more of a risk-taker, willing to gamble a little in hopes of hitting big. This likely goes against everything the saver holds dear, longing for security rather than taking risk for potentially more. The key is finding balance.
Read our recent blog post: Why You Probably Need an Updated Investment Risk Tolerance Test.
10. Do you need help?
This can also be a difficult question to answer, because many people don’t want to ask for help or think they don’t need it. Unfortunately, reports show that many people decide to manage their money on their own. But this can lead to stress, anxiety and mistakes.
As financial advisors in San Antonio, Texas, we often see this with business owners. They tend to wear a lot of hats and feel they’re the best person to oversee their finances. Sometimes this is true, but sometimes their personal finances can be overshadowed by their business’.
Don’t be afraid to enlist the help of a financial advisor. Understand your strengths. And your weaknesses. If your roof was leaking, would you call a professional? The same is true about your finances. A financial advisor can help reduce debt, set savings goals, establish a budget and discuss retirement planning. If your partner bristles at the idea of consulting an outsider, start slow. Schedule a no-obligation conversation with the team at PAX Financial Group to see if we’re the right fit.
Read our recent blog post: 4 Common DIY Financial Mistakes: When Should You Talk to a Financial Advisor?
What Your Answers Mean
At the end of the day, this list of questions is not a test. It’s meant to promote a healthy dialogue, both with yourself and your partner, and encourage discussion of some uncomfortable topics. There is no pass or fail. It’s perfectly normal to disagree on certain topics with your partner. It’s also fine if you don’t know the answer to every question. The key here is to get the conversation started!
If you’re ready to start working with a financial advisor, let’s talk. It’s never too soon to start planning for the future.
This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.
