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Life Events

Life events.  

Getting married.  A job change. Having children. Experiencing a financial windfall. 

Life events are exciting.  They’re also usually surrounded by plenty of dollar signs.  In today’s blog, we’ll talk about these major life events and the financial impact they may have on you.  Our clients typically come to us when one of these major life events occurs.  Having an unbiased viewpoint can help guide people to truly understand what they want.  In this blog, I will walk you through the major life events and the process we take our clients through.

Just like any couple, Natalie and I know firsthand what it’s like to make major decisions for your household (for example: we’ve started a business, we’ve moved across the country, we’ve purchased and sold a home).  We always feel better when we have experts listening to our individual needs and coming up with a collective approach.  We imagine that’s what it’s like for our clients working with us.

Let’s walk through each major life event and the financial considerations surrounding them.

Marriage / Life Partner

This is why we started our business.  We know a lot about money, but we disagreed on how to go about it.  Couples need to be on the same financial page.  That doesn’t mean everything needs to be joint, but it does mean you have to establish a mutual understanding of what can and cannot be done.  

Financial disagreements are one of the leading causes of separation.  However, we believe we can flip that narrative.  Financial agreements should be a leading cause of staying together.  Think about how valuable constructive financial conversations can be on a relationship. These conversations are more of an art than a science.  Here are just a few ways we help moderate:

Understand each other’s past relationship with money

  • Do you know how your partner’s past money experiences have impacted them today?  We’re all born with a blank canvas.  That canvas fills up as we witnessed the money conversations our parents had (or lack thereof), got our first jobs, and had our first painful money.  The more time we take to process those experiences, the better we can understand why we operate the way we do with money today.  

Create a spending plan

  • The most thriving financial households we work with have the best understanding of their household cash flow.  
  • We help couples develop a transparent household budget.  Most of the time that means creating joint accounts or utilizing joint credit cards.  However, it can be adjusted to fit the needs of your household (single accounts/cards).  
  • Regardless, both parties need to understand what is coming in and what is going out.  Understanding your household’s spending patterns provides clarity into where you can reduce expenses and where you can increase savings.  

Establish a joint savings fund  

  • Most of our clients have made the decision to establish a joint savings account.  How do you know if a savings account should be joint or not?  This is the question we ask: if your partner lost his/her/their job would you help cover their household expenses?  If the answer is yes, you should establish a joint savings account.  
  • The savings account should be 3 - 6 months of your net living expenses.  You cannot calculate this figure without first creating your spending plan.  

Other questions you should address

  • How should you set up your checking accounts?  How does getting married impact your estate plan?  How should you file your taxes now that you’re married?  What’s your household’s investment strategy?  When can you both retire?

Job changes

Understanding the impact of a job change is crucial for your household.  The Great Resignation is real.  In the past few years, we’ve helped our clients negotiate pay raises, more vacation days, and deserved job titles.  There’s tremendous value financially and emotionally when asking for what you’re worth.

Job changes also provide a window of opportunity to assess your household’s benefit elections.  It’s important to do a comparison of each partner’s benefits and select the options that are most advantageous for your coverage and from a cost perspective.

Children

I’m honored to say that Natalie and I are some of (if not the first) people to know when our clients are pregnant.  Our clients want to know the financial impact right away.  

Having a child proves that the plan we create is constantly evolving.  Rather than talking about saving for a vacation, the conversation pivots to discussing daycare costs, projecting college savings, and discussing dependent care flexible spending accounts.  Some of our clients have even started paying a nanny and running their own payroll for nanny services.  These are all important reasons to seek financial guidance.

Financial windfall

Financial windfalls come in various forms.  Your company stock has appreciated far beyond expectations and you need to develop a strategy to diversify away from a single stock.  Your options are vested and you don’t know how to best sell taking into account tax considerations.  You received a promotion and now receive restricted stock units (RSUs).  Your parents are gifting you $16,000 per year.  You received an inheritance from your grandparent.

Knowing how to handle financial windfalls is important.  Financial advisors should empower you to feel confident in how best to utilize the funds.  You should understand the investment, tax, and emotional implications of any sudden financial change.

Having an unbiased third party through it all

The decisions we make with money can have lasting effects on our well-being. Add your partner and their financial obstacles in the mix and things get pretty serious.  Having an unbiased third party facilitate conversations is one of the greatest value adds a financial advisor can provide.

Now what?

When I was an intern, I sat outside of an older stockbroker’s office.  I learned so much listening to him talk on the phone.  When the market was down, he’d always say the same quote to his clients.  He used to say “everything will be all right in the end, and if it’s not all right it’s not the end”.  This is one of my favorite quotes.  I often say it to Natalie when something doesn’t go as planned.  

Financial planning for our generation is shifting.  It’s no longer about buying and selling individual stocks.  It’s about helping in the human behavior of change.  Of course, there is the technical expertise we provide.  But our clients seek a more relatable and holistic experience with their finances.  

I recently discovered that the stockbroker was only repeating one part of the entire quote.  In its entirety, the quote is, “All we know about the future is that it will be different.  But perhaps what we fear is that it will be the same.  So, we must celebrate the changes.  Because, as someone once said, everything will be all right in the end.  And if it’s not all right, then trust me, it’s not yet the end.”*

The first part of the quote speaks volumes.  It’s beautiful.  It’s financial planning.  

We must celebrate the changes.  Life events allow us to reassess and think about how we approach our money differently.

*“All we know about the future is that it will be different. But perhaps what we fear is that it will be the same. So, we must celebrate the changes.” – Judy Dench, The Best Exotic Marigold Hotel



Disclaimer: This article is for informational purposes only and is not a recommendation of Fyooz Financial Planning, Natalie Slagle CFP®, or Daniel Slagle CFP®. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. Therefore, it should not be assumed that future performance of any specific security, investment product or investment strategy referenced in the article, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s). No portion of the article shall be construed as a solicitation to buy or sell any specific security or investment product or to engage in any particular investment or financial planning strategy. Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products, which otherwise have the effect of reducing the performance of an actual investment portfolio.

Dan Slagle
Founder, Fyooz Financial
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