FINANCE
Merging Your Money When You Marry
Getting married is exciting, but it brings many challenges. One such challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future.
Discuss your financial goals
The first step in mapping out your financial future together is to discuss your financial goals. Start by making a list of your short-term goals (e.g., paying off wedding debt, new car, vacation) and long-term goals (e.g., having children, your children's college education, retirement). Then, determine which goals are most important to you. Once you've identified the goals that are a priority, you can focus your energy on achieving them.
Prepare a budget
Next, you should prepare a budget that lists all of your income and expenses over a certain time period (e.g., monthly, annually). You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills. If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that both of you understand. And remember to keep your records in a joint filing system so that both of you can easily locate important documents.
Begin by listing your sources of income (e.g., salaries and wages, interest, dividends). Then, list your expenses (it may be helpful to review several months of entries in your checkbook and credit card bills). Add them up and compare the two totals. Hopefully, you get a positive number, meaning that you spend less than you earn. If not, review your expenses and see where you can cut down on your spending.
Bank accounts – separate or joint?
At some point, you and your spouse will have to decide whether to combine your bank accounts or keep them separate. Maintaining a joint account does have advantages, such as easier record keeping and lower maintenance fees. However, it's sometimes more difficult to keep track of how much money is in a joint account when two individuals have access to it. Of course, you could avoid this problem by making sure that you tell each other every time you write a check or withdraw funds from the account. Or, you could always decide to maintain separate accounts.
Credit cards
If you're thinking about adding your name to your spouse's credit card accounts, think again. When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other.
If you or your spouse does not qualify for a card because of poor credit, and you are willing to give your spouse account privileges anyway, you can make your spouse an authorized user of your credit card. An authorized user is not a joint cardholder and is therefore not liable for any amounts charged to the account. Also, the account activity won't show up on the authorized user's credit record. But remember, you remain responsible for the account.
Insurance
If you and your spouse have separate health insurance coverage, you'll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate. For example, if your spouse's health plan has a higher deductible and/or co-payments or fewer benefits than those offered by your plan, he or she may want to join your health plan instead. You'll also want to compare the rate for one family plan against the cost of two single plans.
It's a good idea to examine your auto insurance coverage, too. If you and your spouse own separate cars, you may have different auto insurance carriers. Consider pooling your auto insurance policies with one company; many insurance companies will give you a discount if you insure more than one car with them. If one of you has a poor driving record, however, make sure that changing companies won't mean paying a higher premium.
Employer-sponsored retirement plans
If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan's characteristics. Review each plan together carefully and determine which plan provides the best benefits. If you can afford it, you should each participate to the maximum in your own plan. If your current cash flow is limited, you can make one plan the focus of your retirement strategy. Here are some helpful tips:
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If both plans match contributions, determine which plan offers the best match and take full advantage of it
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Compare the vesting schedules for the employer's matching contributions
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Compare the investment options offered by each plan--the more options you have, the more likely you are to find an investment mix that suits your needs
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Find out whether the plans offer loans--if you plan to use any of your contributions for certain expenses (e.g., your children's college education, a down payment on a house), you may want to participate in the plan that has a loan provision.
IMPORTANT DISCLOSURES
Securities offered through Sage Point Financial, Inc., (SPF), member FINRA/SIPC. SPF is separately owned and other entities and/or marketing names, products or services referenced here are independent of SPF, Fixed and/or Traditional Insurance Services may be offered through Capital Insurance & Asset Protection LLC, which is not affiliated with SPF or registered as a broker-dealer.
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Haren Mehta, managing partner of Capital Insurance & Asset Protection in Tampa, can be reached at (813) 679-5204 or email [email protected]
BUSINESS BUZZ
Building an Agile Culture
The rapid changes in our world (especially the Covid-19 pandemic) are defining a new phase, and there is a need for a more intentional and pro-active approach to leadership in organizations. The survival of every organization is growing marginally less reliant on how "efficient" the business system compared to how flexible they are at handling change.
The pandemic has served as an eye-opener to many organizations on the dangers of sticking to a rigid "tested" system of management as embraced to preparing for rapid change. The world might have evolved from the Stone Age, but one thing remains clear: Only those who can adapt survive in the end.
Building an Agile Culture in your business should be a top priority for every organization – there is a system to doing so:
Understand existing processes
What is there to change if you do not understand the model in which the organization is currently running? This has little to do with personnel, but more with how information, decisions, and other tasks are handled within the company. Agile Culture will most likely function better if it can be based on the existing structure.
Know that people run the system
The traditional practice in most organizations is to recruit people or employ staff and absorb them into a running system. In most cases, the individual may not be the best suited for the system, but they must “kill” their abilities and align themselves to the system. This system is the biggest killer of creativity and ingenuity in any organization.
“As a leader, it is important to not just see your own success, but focus on the success of others,” says Sundar Pichai, CEO of Alphabet. Build the culture around real people, not systems.
Create physical enablers to support the culture change
Many planned company culture have met their untimely end simply because they were too sophisticated for the tools available. And it was hardly a problem of money as it was a problem of creating the right environment to cater to the culture.
Do you need to isolate a team? Do you need to break physical barriers? Are there too many bureaucracies involved in organizational planning? These are all barriers to Agile Culture in organizations.
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Imbibing new habits
It is not equally bad to redefine an organization's mission and goals and relate it to the personnel. Read it, practice it, commit it to heart, do it, just anything to keep the excitement alive. A constantly hammered-on idea hardly loses its intensity in the heart of the faithful.
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Encourage the employee to "own" tasks and become more creative.
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Emphasize the importance of taking out key points from reviews and lessons
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Converge the organization’s effort to relevant tasks and activities that promote the mandate.
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Continuous improvement through adjustments
One beautiful thing about Agile Culture is that it does not follow a particular rule or path. It is random and adopts various processes until it gets to the one that works. There is almost no "rest" with agile leadership until the process becomes efficient.
Agile leadership has become the seemingly sensible way forward for businesses post-Covid-19. The rapid and acute impact on business process means the various layers of business management must become flexible and resourceful. Agile Culture means every level in the company would require adjustments.
Only organizations averse to continuous improvement will scorn at Agile leadership.
Dr. Karyn Mathura-Arthur is an agile implementation leader with experience in Operational Excellence, Continuous Process Improvement, Business Transformation, Process Engineering and Organizational Change Management across multiple industries (banking, insurance, healthcare, telecom, government, retail, etc.). For comments and suggestions, email [email protected]