Married Financial Experts Give Real-life Money Advice for CouplesJanuary 31, 2018 6:42 pm
Money—it’s too often the elephant in the room and one of the most frustrating topics to discuss as a couple. How do couples cope? The key is to openly communicate about your finances and to make sure each partner understands their role in managing your money. More than anything, it’s vital to discuss your financial goals with each other to help stay on track.
This is sage advice from finance-industry couple Tracie Kenyon, president and CEO of Montana’s Credit Unions and her husband of 12 years, Eddie Black, who is the president and CEO of a local credit union.
They have answered 7 questions about their finances that will help any couple trying to get into a groove with their marital money management. Read on for their advice.
How do you balance financial responsibilities as a couple?
Eddie: Well personally, I take the “big” stuff or strategic items. I get to do our taxes, retirement planning, purchases of homes, and those kinds of decisions. I take responsibility for all the long term, both the good and bad, of financial planning.
Tracie: I make sure bills are paid and accounts are reconciled. I am the one that might say, “hey we might need to slow up this month on spending.” This setup works for us really well because we communicate constantly.
What’s your best piece of advice for couples when making financial decisions?
Eddie: For me, the key would be constant communication. We are constantly bartering back and forth about what we have going on the next month. For example, we may have to pay property taxes next month, so we would decide we better hold off on buying a new car. More than anything, we make sure we know what the other is doing and the financial decisions we’re making.
Tracie: Since we started putting everything together into one joint account, it has worked much smoother.
How do each of you stay financially organized and what are your favorite tools?
Tracie: We personally use Quicken, but I know there a lot of other tools. In fact, the program Momentum onUP, which Montana credit unions use for financial wellness, has a great tool for tracking budgeting and finances. At the end of the day, it is important that you are using something, even if it’s just an old-fashioned pencil and paper.
The most important habit is to track your spending. It’s imperative to be able to know where your weakness is, just like it is important to know where your strengths are with finances. That is the first thing any financial expert or guru is going to tell you; you must track your expenses.
How often do you budget – monthly, weekly?
Eddie: We have all of our money in a joint account, or “family account,” and all of the money flows into that joint account. Tracie controls and balances that account. From that account we each get individual allowances, so technically I get paid by Tracie. She disburses those allowances to us, so we each have our own money to spend for gifts, golf outings or for hair appointments, whatever the expense may be.
From a budgeting perspective, while we sit down frequently and it’s an ongoing conversation, we discuss and write down our financial goals each December. That’s when we ask questions like what we want to set aside this year for church? What do we want to set aside for retirement?
For example, this time last year, while driving to visit family, we came to the conclusion that we needed to up my 401K allocations because I was hitting the age of 50. We allocated another $5,000 to put into our 401K. We then discussed how that will impact the rest of our finances and goals.
Tracie: What we find is that once we have our financial goals set and have determined how we are going to fund them (whether it is a big purchase, a big trip, etc.), we figure out how to make it work. Sometimes something else has to give to make those goals possible.
We have certain expenses that are fixed. We put our recurring, fixed expenses in a budget so our monthly expenses remain the same, which gives us the ability to pivot or make other changes as necessary.
The ironic thing is, over the last few years we’ve ended up spending about the same every year for groceries or eating out, and those are two areas you can really make some adjustments in your budget. We are just kind of in a bit of a groove, but it took us awhile to get there – I’m not going to say that we automatically got into that groove.”
How much do you set aside as an emergency fund in addition to your long-term savings?
Tracie: We take the advice of most financial planners and have 3-6 months’ worth of our expenses set aside, and that money is in an account we try not to use.
In addition, we have our long-term savings account, our retirement fund, and a college savings account for our daughter.
What are your thoughts on focusing on growing your personal net worth? How can people focus on long-term wealth management?
Tracie: This is one of the reasons why I’m thankful that we use a financial tool. I can look and see our net worth and use it as a measurement.
You can ask yourself, am I moving forward? You can have all the stuff, you can have all the toys, and you can even afford all the payments, but life can sometimes happen to you unexpectedly. You can sometimes find yourself in the position where you don’t have the ability to make those payments any longer, and if you don’t have anything in reserve you could be in trouble.
I would look year to year. Around the first of the year, I run reports to see our net worth, look at where we have changed from year to year, and how we could improve our cash flow.
Is there anything you recommend reviewing going into the New Year?
Eddie: Tracie and I were having this discussion the other day because of the financial bubble we believe is coming, and we want to keep an eye on our 401ks. Also, about every other year, we take a good hard look at all of the insurance policies. I believe if you are with a particular insurance company and you have been for a while, you are probably paying too much. I believe the same goes with your cable bill.
When you have two cars and a house that you are covering, insurance can get high very quickly. You can often end up with the exact same coverage by just going to your insurance providers and asking them to requote it. I think you should try to get in the habit of doing that about every other year.
Tracie: We also make sure that our life health insurances are up to date. We did a full review of all of this last year to make sure that we have the appropriate coverage, not just the right price.
Eddie: We make sure that we are maximizing our tax deductions and our benefits as well. More than anything, we want to make sure that we are preparing for our future. We are also making sure that we are getting all of the tax benefits that we can get.
Tracie: With tax advantage accounts like that you want to make sure you’re not leaving anything on the table.
Tracie and Eddie are clearly pros at managing their money, both at work and at home. Their main points for any couple trying to get on track financially are to:
- Make sure you regularly and frequently communicate about money, your spending, and your goals – even if it’s awkward!
- Budget, track, and set goals each year.
- Realize that those goals might change and require you to recalibrate your spending in other areas.
- Be smart about planning for the future – make it a priority and don’t leave it until the last minute.
How do you and your spouse communicate about your earnings and budgeting? Let us know in the comments or on Facebook.
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