Financial Problems in a Marriage

It is said that marriage is the best thing that can happen to two people in love. It is true, provided the spouses understand each other and are aware of the responsibilities that come with marriage. However, married life can suffer a setback, if there are financial issues in a relationship and the partners do not work it out properly to solve these problems. In studies conducted by experts, financial issues have been included as one of the top reasons for a divorce. So, it is always better to be aware of financial problems, if any, and find effective ways to deal with them.

Monetary Issues and Their Solutions

Handling Finance
This is one of the basic issues that married couples face. They are not clear about whose salary should be used for household expenses and whose should go in for savings. Lack of planning leads to confusion, ultimately resulting in differences between a couple.

Solution: Couples should try different ways to handle their finances and check which one works the best for them. According to surveys, around 64% of couples have joint accounts, 14% of them have separate accounts, and 18% of couples have both joint as well as separate accounts. There is no particular method to handle finances; it depends on a couple as to how much they want to spend and how much they want to save. So, sit down to decide among yourselves, and make the best call for your future.

Excessive Spending
Among the various money-related problems affecting a marriage, spending habit is a contentious issue. Many a time, one of the partners is inclined to shop and spend more than the total earnings with the help of loans and credit cards. Mounting bills and high interest rates can really make things difficult for the family.

In certain cases, among the two partners, the wife mostly has the habit of presenting her family with goodies every now and then. The expenditure made, might irritate the other partner and ultimately give rise to arguments.

Solution: Couples should fix a budget for the month and keep a check so that the expenditure does not exceed the limit. As far as possible, use of multiple cards should be avoided. When going through tough financial times, couples need to cut down on entertainment and leisure expenses. Wives and even husbands, if either is into the habit of buying unwanted gifts, should keep away from doing so. This is because, occasional exchange of gifts does not affect, as much as the usual ones do.

Mounting Debts
Sometimes while making hasty decisions, it might happen that married couples tend to apply for house loans or car loans without figuring out their repayment capacity. Apart from that, some are even in a habit of using credit cards in excess. This negligence in handling money leads to rising debts which becomes difficult to repay in future.

Solution: Taking loans only as per one’s need and repayment capacity, is the first solution to avoid the problem of mounting debts. One should have realistic aspirations and dreams, and think twice before applying for loans and pledging assets with the lenders. And, if both the spouses are working, they should contribute equally to pay off the EMIs.

Improper Investments
In order to lead a settled life, couples have to think about their future and secure it. Investment done inappropriately is one of the prime factors to be looked into, especially when you have a family to take care of. For this, couples have to make precise investments and while doing so, they have to be careful as it might be a risky affair.

Solution: Couples should figure out the investment goal and time frame, and make sure to review their investments at least once a year.

Unnecessary Expenses
Love is blind and people in love know no boundaries when it comes to spending for each other. They tend to buy expensive stuff in order to please their respective partners. This act of unwanted splurging causes problems later on, and couples start blaming each other for mismanagement of money.

Solution: In order to avoid financial hassles, couples should refrain themselves from buying expensive gifts and going for lavish holidays. As is rightly said “cut your coat according to your cloth” couples should spend according to their capacity.

Crisis
An unstable monetary situation arises due to the lack of savings for your future use. An accident, a major illness or an unexpected pink slip, or any other emergency – all situations which require you to dole out a large sum of money – can land you in peril.

Solution: Problems are unavoidable and can never be predicted. So, instead of waiting for the problem to arise, couples should keep themselves prepared for the bad times. They should make sure that they have an emergency savings account. They should plan their monthly savings together along with a target amount to be saved every month, so that they have enough in hand when a sudden need arises.

Ego Clashes
This is the age where women have caught up with men in every field and are the breadwinners. These days, in many households, we can find women earning more than men which hurts the male ego to a great extent, and if a man is jobless then the situation gets even worse. In such cases, it becomes really difficult to save the relation, as both the partners have their self-pride and none of them is ready to bow down.

Solution: Marriage is a union of two souls and bodies, so couples should treat each other as one. To avoid ego clashes, men should see situations in a broader perspective, and instead of getting offended by their respective wives’ earnings, they should encourage them to work. After all, whoever earns, eventually the income will be utilized for the family.

Keeping Financial Secrets
This is undoubtedly one of the biggest financial problems in a marriage. Many spouses are seen hiding their financial documents, bank account statements and information about their assets, which can be frustrating for the other spouse.

Solution: It is always better to speak the truth, and show all your financial details to your partner. By doing so, your better half would be able to suggest ways of dealing with finances, if need be.

Some Tips for Managing Family Finances

A family begins with ‘We’ and not ‘I’. So, while dealing with money matters, always remember that you should think for the well-being of your family.
If your problems are too big, take suggestions from a financial planner.
When you commit to managing finances, fulfill it at any cost, because the other person relies on you.
Think before you spend, because money should be used wisely.
Try to avoid interference from relatives in your family finances (if any).
Don’t be jealous of a higher-earning spouse. Instead, motivate your partner to do well in his/her career and earn even more.

Marriage is a lifetime commitment, so never ignore the petty issues. Financial issues can be resolved easily, so do not waste time crabbing about it. Your family’s betterment and future depends on the same.

Financial Planning Tips For Couples About To Start A Family

Couples, especially newlywed ones, would usually enjoy a bit of financial windfall for the first few months or years of their marriage. This is mainly due to the fact that two people are now sharing the expenses on food, utilities, and other expenditures. There are also more opportunities for couples to save money since they have lesser expenditures to pay for.

This happy situation can easily turn sour though when couples are expecting their first child. With this new bundle of joy come various additional expenses that parents will sometimes find it hard to cope with their financial needs and even adjust their lifestyle.

Couples, though, don’t need to find themselves broke simply because they are expecting or already have their newborn baby. Below are some useful financial planning tips couples about to start a family can follow:

Start living a simpler lifestyle. It is not unusual for newlywed or childless couples to have date nights once or twice a week wherein they have dinner at a fancy restaurant and give each other lavish gifts. They will also go on vacations abroad once or twice a year because they want to get some rest and relaxation and because they “deserve it”. Unfortunately, all of these will have to change or even stop once a couple is expecting a baby. All the money you will save from these activities or events can go to something more important like payment for the hospital bills, medicines and vitamins, diapers, and other expenses that come before and after the baby’s birth. The last thing you want to happen is to be covered in debt just because you are expecting a baby. You can avoid this problem by living a simpler lifestyle once you know that you are expecting.

Anticipate your expenses. Make a list of all your anticipated expenses. These include hospital bills, doctor fees, maternity clothes, birthing classes, and necessities for the baby (a crib, stroller, feeding bottles, blankets, etc.). Then, calculate the total. You now have to rework the budget you and your partner are currently on to include this cost. Expect that there will be expenses that have to be added in the future but don’t fret; you will be able to figure them out as you go.

Increase your emergency fund. If you already have a safety financial net, you and your partner or spouse should now work on increasing it. Financial advisors recommend having six-to-nine months of living expenses set aside in case of job loss, which can become more of a problem if one spouse is at home on childcare duty. Look at your budget again and figure out how much you can afford to put into an emergency fund after all the basic necessities are covered.

Financial Planning for Women

Financial planning – the term in itself refers to making of concrete plans to improve your financial power. Now, unlike what some people may think, financial planning is not at all difficult, all you need is to be aware, think and calculate. After all, financial planning is a mathematics, which is rational and as simple as 2 plus 2 equals 4. So fear not, here are some tips, plans and some do’s, also some don’ts.

Now, here, I shall be taking you through some great investment and planning channels, plus some tips for planning your expenses well in advance. Financial planning for women involves handling two primary aspects related to personal finance, expenses and investment. When you receive your paycheck, there are two things that you can potentially do: one, use the money for essential expenses; and two, investment the money. Note that common savings is also included in expenditure.

Planning for Expenses

Personally, guys no offense, I believe that since women are capable and do manage one of the most difficult institutions in society, that is their family; they are better at handling expenses (not through credit cards), than most men. This was not a compliment, but a fact.

So, principally, about 20% to 40% of your income is going to be spent on essential expenses, food, clothes, make-up and cosmetics, rent and commutation. Now before the month starts, calculate and estimate how much you would spend on each item. Also you would need to include some expenditures such as a couple of parties, sleepover and hangouts while doing so. Some of you may have medical expenses hence consider those too. Listing these out was the first step, next analyze and make a list for identifying the expenses which you can cut down. If you look, observe and think properly, you will notice that, except for things such as food, rent and medication, you can cut down on almost everything.

The third step is to make a table of budget with 22-30-31 columns (covering days of a month), whichever is appropriate. In this table, write down the expenses that you have estimated and throughout the month try to stick to them. This can be quite difficult and also quite easy. Since sticking to the budget is not always possible and some unexpected expenses tend to come up, one can always put away certain amount of money as a backup fund.

Planning for Investments

After you have paid off all your expenses, you can turn your attention to investments. Again this can take about 30-40% of your income. The following are some excellent options which you can use.

Life Insurance: If you have a family, then this is the most important investment for you, as a life insurance not only pays off all the returns on investment, but there is a death benefit which is available which ensures your family’s financial security and well-being. You can invest up to about 10-15% of your income in such an insurance policy.
Funds and Securities: Mutual funds, variable annuities, Systematic Investment Plans (SIP), Collective Investment Schemes (CIS) and other mutually invested funds are medium risk investments. Here you have a 5-7% return on investment along with the total amount that you invested initially. This facility is termed as guaranteed minimum returns facility. Apart from the minimum returns in such schemes, you also receive the bonus and portfolio performance returns, which chiefly depend upon the portfolio performance and also economic conditions. Again this can take up about 10-15% of your income.
Government Provided Investments: These are the most secure of all as investment options. Channels such as IRA, 401(k), government bonds and certificates tend to provide a good rate of return that accounts to about 5%. Such investments will take up even lesser than 5% of your income.

You can also consider some options such as real estate, direct share investments, gold, silver and bullion and futures and options. However, such investments are quite risky and worst of all you have to invest a lot of time in them. Apart from that it is also recommended that you maintain a 30% balance in your bank account as a safety precaution. Now, all you have to do is plan accordingly and choose the right expenditure and investment.

 

Career As a Financial Planner

With more and more people investing in the stock market, the demand for financial planners is increasing by the day. There is a lot of competition for jobs, with security brokers and dealers paying top dollar, for skilled financial planners. This profile is recognized by several names like financial planner, financial advisor and personal finance consultant, but it is rarely referred to by its ideal name: Financial Product Sales Representative.

Every small occurrence in our life has an effect on our financial planning, be it a thought to buy a car or start a new business. It is a famous misconception that financial planners are important only for businessmen, actors or other wealthy people, but in reality even the most average earner makes investments and takes the help of a financial planner for it.

Duties of a Financial Planner

These professionals make recommendations and give guidance to individual investors regarding financial planning. Financial planners have knowledge of tax laws and use it to provide tax advice.

Financial planners also help in estate planning. They use their knowledge to gauge the need for expansion of the estate or merger with another business entity. Every investment or expense goes through the hands of financial planners before the final approval.

A financial planner has to advise many clients in order to be considered successful. There is a difference between financial analysts and planners. Financial planners work with personal investors while financial analysts work with organizations.

If you want to know how to save money for a college education, you will need the services of this financial planning professional. If you want to write a will, or plan for a secure and comfortable retirement, you will need a financial manager.

They also sell life insurance to their customers. Private bankers also fall into this category, since they help rich people manage their money.

Educational Qualifications

To become a financial planner, you have to get a degree in economics, business or mathematics fields. It is even better if you have a Master’s degree in Business Administration (MBA). You can also take courses in taxes, estate planning or risk management. There are certain colleges and universities, too, that offer a degree in financial planning.

Before working as a financial planner, he may work as an accountant, auditor or even a lawyer. There are also certifications available such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), or Chartered Financial Consultant (ChFC).

You can also get a license by taking the Series 6 exam, to become an Investment Company Products/Variable Contracts Limited Representative. You can take the Series 7 exam, to become a General Securities Representative. You can also take the Series 63 exam, which is the Uniform Securities Agent State Law Examination.

All three of these exams have been developed by the Financial Industry Regulatory Authority (FINRA), which was previously known as National Association Of Securities Dealers (NASD).

Skill Set

Apart from the qualifications mentioned above there is a requirement for a basic skill set as follows:

Analytical Skills- A financial planner has to advise his clients on investments they need to make for which the client should be able to acknowledge a profitable investment.

Interpersonal Skills- The major aspect of his job is to make the customers feel comfortable. They should be able to trust you with information they are providing you; for this having excellent interpersonal skills is a must.

Math Skills- You should also be able to work with numbers, because they need to use math to analyze data.

Speaking Skills- To convince clients and to explain complex financial aspects in simple words you need to have a good command over English or whichever is your local language and communicate well.

Selling Skills- Marketing strategy and sales techniques are required to get more customers and clients at events such as seminars, lectures or conferences.

Acquiring a New Deal

If you wish to gain success in this field then a broad social network is a “must have”. The key principle is to build a strong customer base because satisfied customers’ referral is an important source of expanding business.

There is no portal over the Internet which will find for you your next customer. Whether you opt for giving seminars and lectures or using social and business contacts, you have to hunt them yourself.

Workplace
More than 50% of the financial planners work for insurance and finance companies, it can be a bank, broker, insurance carrier or a financial investment firm. Even so, 4 out of 10 are self-employed having an independent advisory firm. Such cases are more common in urban areas than in rural areas.

Advancement Opportunities

With time and experience, a financial planner can climb up to the position of a manager. In general, most of them build up to establish their own advisory or security firm.

Earnings and Job Outlook

According to the statistics of 2010 provided by the Bureau of Labor Statistics, the median salary of financial planners in 2010 was $64,750 per year, with half of the total employed earning below this level and half above it. This does not include self-employed and the bonuses. A fresher may earn anywhere around $32,660 per year.

This sector is believed to accelerate 32% by 2020, increasing job opportunities by 66,400.

A Day in a Financial Planner’s Life

The tasks in hand during a typical day at work includes:

Gathering new clients via marketing and channel building
Meeting with the existing clientèle to assess their financial requirements and future goals
Updating clients with the current scenario and scope for investments
Conforming clients’ financial plans in line with their life changes such as marriage, childbirth, divorce, disability and death of spouse, etc.

 

Financial Planning Tips When Expecting a Baby

First time parents are expected to go overboard with preparations once their baby is on the way, be it expenses on baby clothes, accessories, nursery decorations, baby showers, etc. Shortly afterwards, the initial excitement wears down and the nine-month gestation clock starts ticking until D-day. This is when the realization of the extra cost of having a baby sinks in. This is the time when would-be parents start thinking about all the prenatal medical expenditure, expenses towards hospitalization and delivery, pediatric medical expenses, baby food expenses and money spent towards buying clothes, toys and education. I know the list is long and might seem like a money monster which will take away all the excitement of fine dining and shopping that you experienced before the baby came into picture, however, I wish to assure you that some of the financial planning tips listed below will surely ease your journey.
How to Save Money When Expecting a Baby
One of the biggest expenditures for children generally happen to be towards their education. But even before your baby is born, there are heaps of expenses to be dealt with. Here are some ideas to help you deal with these expenses.

Prenatal Medication
As soon as the pregnancy test is declared positive, would-be parents need to start shelling out money towards medical tests, ultrasounds, fees of gynecologists, nutrition supplements and so on. The uphill burden of expenditure can be reduced by opting for a health insurance policy right from the time you get married or start planning your baby. The health insurance company generally expects policyholders to pay a minimum amount towards each medical bill while the rest of the medical expenses are borne by the health insurance company. As a thumb rule, check if your hospitals, gynecologists and pharmacies accept the insurance policy that you have. If not, then I recommend that you search for medical services that have a tie-up with your health insurance company before you set up an appointment. This will help save a lot of money.
Preparation for Baby
It is delightful to go shopping for baby clothes, cribs, car seats, strollers, baby monitors, etc. Some of you might even redo an entire room, converting it into a nursery. As exciting as it seems, babies tend to grow very quickly and it is therefore futile to spend a huge sum on new and expensive baby clothes. Even doctors recommend usage of soft, tender and used baby clothing on babies.
Personally I suggest that you may opt for borrowing baby clothes, cribs, strollers, etc., that have been previously used by your friends for their babies. And if you are lucky enough, you might receive some new accessories for your nursery as baby shower gifts. I can’t help mentioning a noteworthy fact about pregnancy in advanced stages. The recommended restrictions of movement and food consumption for a pregnant woman are likely leave a considerable surplus of money in your kitty.
Delivery
As previously mentioned, couples might have to be careful while selecting hospitals for the upcoming childbirth. It is ideal to get confirmation about the hospital’s tie-up with your health insurance company way before the due date. It is also recommended to get similar confirmations from the obstetrician and anesthesiologist before you appoint them for the delivery. This will help you save a huge sum towards delivery and hospitalization expenses. The arrival of a baby is a wonderful moment. But it is suggested that you find some time to check with the health insurance company for possible addition of your newborn child under health benefits. This might mean an additional expenditure towards premium, but trust me, it is well worth the expenditure. After all, there might be – god forbid – some unforeseen health expenses for your baby.
Baby Arrival
It is quite common for both partners to be working professionals. As soon as the baby arrives, the maternity leave and paternity leave begins. This means that the family income decreases considerably as long as one parent stays at home as a caregiver. It is ideal to refer to the policies of your organization to make sure if they have an option of paid maternity or paternity leaves. At times, organization offer a maternity leave allowance instead of a full salary payment. This stage also marks a steep rise in expenses towards baby food, diapers, pediatrician visits, toys, day care charges or baby sitter charges. These expenses could range anywhere between $1000 to $1200 each month. Accordingly, money needs to be religiously set aside for such payments by both the partners. If you happen to be a single mother, then you have the option of applying for single mother financial aid too.
As the Baby Grows
Before you even realize it, your baby will become a toddler ready for play school. Personally, I suggest that this is the best time to invest in a good education plan for your child that will help secure his or her higher education needs. Such plans are designed keeping in mind the growing inflation rate of the economy. If you love to plan about your every penny, then it is best bet to start saving at a slow rate right from the time you get married. By the time your child is ready for school, you will be surprised at the huge amount you will have saved by then.
Financial planning is a must at all times. At the prospect of arrival of a baby, even the most spendthrift partners start getting calculative. Early planning and budgeting can help couples avoid a lot of mental stress over finances after the baby arrives. This financial security can help you delve wholeheartedly in the realms of your newborn child.