Unlock the secret to financial harmony in your relationship as Sherry Rash and I delve into the intriguing topic of couple's finance in our two-part series, 'Until Debt Do Us Part'. We promise to equip you with practical approaches to balance contrasting money personalities particularly with regards to setting up an emergency fund. Learn how to assess your individual risk tolerance and needs, and find a realistic, comfortable middle ground that ensures your emergency fund truly serves its purpose.
In our compelling conversation, we also explore the potential tension between charitable contributions and retirement plans. Through a real-life client tale, we demonstrate a creative way to sustain support for your chosen charities, while keeping your retirement goals on track. Guiding you through these vital considerations, we stress the significance of open dialogue and compromise in couple's financial planning. So join us, as we illuminate the path towards a financially secure future for you and your loved ones.
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Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through registered representatives of Cambridge Investment Research Inc. A broker-dealer member, FINRA, SIPC Advisory Services through Cambridge Investment Research Advisors Inc. A registered investment advisor Cambridge and Greenway Wealth Advisory are not affiliated.
0:00:20 - Speaker 2
It's time to dive into some insider secrets of investing and retirement planning To make your retirement as smart and as elegant as possible. This is Money Chic with Sherry Rash. Welcome back into another edition of the podcast. It's Money Chic Women in Finance, with Sherry Rash and myself here to finish off our conversation. Our two-part podcast Until Debt Do Us Part we talked about that on the prior episode where we're covering some issues that could pop up, some financial sources of tension between couples, and so we want to try to stave off those.
We did some pretty heavy hitters on the first part of the podcast. If you didn't check that out, you don't have to listen to it, to listen to this one, but it's certainly not a bad idea, I should say, to go in there and take a listen to that. Nothing wrong with it, because it'll certainly hopefully provide you with some insights on some big topics as well. We covered things like the retirement age if there's a difference in each person's retirement deadline, if you will legacy for the children Somebody wants to leave something, somebody doesn't want to leave something, that kind of stuff. So we're going to pick up with five more places that could be sources of tension with Sherry this week on the podcast. What's going on, sherry? How are you?
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I'm good. Merry Christmas in July.
0:01:31 - Speaker 2
Have you been watching Hallmark?
0:01:34 - Speaker 3
I haven't been watching Hallmark. It takes me a while to get into the Hallmark. I feel like you have to start those. You can't jump in. I need to start them from the beginning to understand what's going on, even though they all have the same premise.
0:01:45 - Speaker 2
0:01:46 - Speaker 3
You know someone's single, they fall in love. They go to their hometown.
0:01:49 - Speaker 2
They get to fight right before the climax and they fix it right before the final 15 minutes. Oh, my wife is down the whole rabbit hole of July, so I'm right there with you.
0:01:58 - Speaker 3
We were watching National Lampoon Christmas Vacation. So we were enjoying that and the kids wanted hot chocolate and the 90-degree weather hot chocolate. So we're in the spirit, okay.
0:02:09 - Speaker 2
All right. Yeah, it's too hot. There's no way. Thankfully, my daughter was never a big. She was showing me a little hot chocolate literally at Christmas, like actual Christmas in December. So I think I'd have been like girl, you're crazy, it's too hot for that. And it's like I think it's gonna be 97 today, or something like that.
0:02:30 - Speaker 3
I tried to say no, but after a while they just beat me down. Well, there you go. You got to do the mom thing. That's all right, Nothing wrong with that.
0:02:37 - Speaker 2
Well, let's get in here, see if we can share some more of your insights on some of these things that you've seen in your practice. And because money as we talked about before it's the number one source attention, often most of the times for married couples, and we want to try to stave off some of those things where we can, and we covered lots of different ones, so let's get into a few more. Let's talk about the emergency fund savings. This is number six out of the total 10.
And this could be that conversation, sherry, where it doesn't really matter your age. You really could have reared its head during COVID, for example, if one member of the family lost their job. Possibly you know, maybe both did, or whatever and you could have this argument over. Well, how much is the right amount to have in the emergency fund? Advisors say things like three to six months, but let's say somebody, let's say that's 15 grand, just for a hypothetical, but one person feels better with double that. So then they can really argue or get stressed out about what's comfortable and what's not.
0:03:33 - Speaker 3
Yeah, it really comes down to like we talked about last episode. If you haven't checked it out, like you said, give it a listen because they are common arguments or topics of discussion. But emergency fund is a big one. When I'm working with my clients, sometimes moving forward in more advanced decisions as far as their financial future goes are sometimes put on hold because of the emergency fund. Or how much should I have in a checking account? Which seems so basic, but you can Google the answer right. Three to six months is the rule of thumb, but it's sometimes it just doesn't feel right or it doesn't feel like it. That should be what it is, or it's too much or not enough.
And sometimes you just need someone to walk you through what really makes sense. I love talking about emergency funds with my clients. That's one of the first things we talk about, because I don't feel right moving on to bigger topics until we handle this one and it really comes down to like we talked about last episode your money personality. What are you comfortable with? Also, if one spouse works, the other doesn't, you probably should have more in your emergency fund than versus if you both have a consistent income. So there are some things to consider, but three to six months is generally the rule of thumb.
0:04:52 - Speaker 2
And all of these really require some compromising conversation, right? Because, again, if one person needs a higher number to feel like they can sleep at night and not be stressed out but that's not realistic then you've got to be willing to try to find that happy ground someplace, right? So, again, if we just used my example of 15 grand, is what's required, so to speak, or what's advised by your financial professional. And you want double that? Well then, make sure you're willing to meet your spouse maybe halfway, and that's the case with anything in marriage, right? We all know that.
0:05:21 - Speaker 3
So, and something else I would say is is your emergency fund a true emergency fund? Many times folks have emergency funds but they're really like slush funds. They're. Well, I'm moving money into my checking account because I have this coming up and I'm going to move it back. If your savings account and your checking account kind of slither back and forth between each other, that's not a true emergency fund and that might be why you feel uncomfortable is because you're constantly borrowing from it and then paying yourself back. So an emergency fund should be with a lock and key socked away that you are not moving money into the checking account here and there when you need it. It should be locked away and maybe once you have that, oftentimes I find that those are more that want more money in the emergency fund. Once they know this money is away in a lock, with a lock and key, they're more likely not want needing as much cash as the beginning of the conversation.
0:06:19 - Speaker 2
Gotcha. Okay, all right, and so let's go from emergency fund then to charitable contributions. Now again, this may not be as big as some of the points, as some of the other ones we covered on this list, but it could be right. I mean, you could have a person who was maybe they were raised in a situation where you know charitable contributions tithing, for example, often pops up is important to them, but the other person was not, and so there's a little disconnect there.
0:06:43 - Speaker 3
Yeah, I'll. So sometimes it's an internal struggle, right, you want to give to organizations that you feel passionate about but, it could be to your own. It could hinder your future plans. I have a client that she is very charitable. She gives a lot of money to organizations she supports but at the end of the day it was pushing her retirement back and back and back.
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I had to have yeah, I had to have the conversation of what you're doing is amazing, but if you want to retire, you're going to have to pay yourself first True, and if there was a spouse on the other side of that, they could be like hey, wait a minute, this is like me too, right?
Exactly so we talked about well, why don't we designate a charity as one of your beneficiaries? So then you know they're going to get money after you pass it, kind of. And it helped her sleep better because she, because she felt a little uneasy about stopping the contributions, but then adding them as the beneficiary made her feel better because she's like, at the end of the day, I do have to retire, I need to retire, I want to retire, so I have to. You know, what do I want more? And the answer was retirement. But having the charity as a beneficiary helped that internal struggle.
0:07:55 - Speaker 2
And it's pretty similar to the legacy conversation, really. You know that we talked about on the first half of this, sherry, when talking about leaving money for the kids or grandkids. Same kind of concept, right, it's great to want to maybe give them as much as you can, but you also have to not sacrifice your own retirement, because then you're wind up knocking on their door anyway.
Asking for help so it's kind of falls into that same kind of category. This might be for folks who don't have children. Often that's something they look at as charitable contributions or just because you're charitable minded, but again, maybe you are and your spouse isn't, so that could be a point of contention. All right.
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So that if seven was giving money, let's go to eight, which is you receiving money. So how to handle inheritances? A friend of mine, a father-in-law, maybe a father-in-law, something like that, anyway, he got, they got some money, like 20 grand or whatever it was, and he had some lofty, you know fun toy ideas he wanted to spend the money on. And his wife was like well, wait a minute, let's pay off some debt that we have, right, let's be a little bit more responsible with it. So it's kind of fun, you know, when you, you know, obviously you lose a loved one, that's not fun, but it's kind of like when fall money, I guess, for lack of a better term, whatever, wherever it comes from, Sometimes you do kind of want to splurge on yourself. You feel like, hey, I've, I'm working hard, or whatever the case is, I want a little treat. But you need to be respectful of the other person's wishes too and find that happy ground.
0:09:16 - Speaker 3
It comes back to a money personality, right so some people want to do the prudent thing of paying off debt or, you know, reducing their mortgage or what have you, and then others want to have fun with it and I think there's a compromise. And it's also just a weird feeling, right. When you receive an inheritance, obviously it's a bittersweet occurrence because, like you said, you lost a loved one and that's terrible, and then you receive this money. I think the first thing to do is understand the type of dollar. It is Not all dollars are created equal. When it comes to an inheritance, and if you receive a qualified plan, a 401k, an IRA retirement account, if you just cash it out, you're going to have a big tax bill. So, understanding the dollars that you receive they're not all equal. So, definitely having a strategy around it and yeah, I've dealt with clients that I've had the struggle of I feel like we should do something prudent with this money.
What would my mother want me to do? What would she say? How would she feel? And I kind of say it's a compromise. You know, do something that you know they would appreciate or be happy with, whether it's going on a nice family vacation or making an improvement to your house that you've been talking about for years and years. Do something nice with it, but then maybe not spend it all to have a safety guard, you know. So compromise with it, I think, really, and think about the loved one and what would they maybe want you to do with this money?
0:10:44 - Speaker 2
That's a good way to look, because they had intentions. I like that. That's a good way of looking at it. You could say okay, you know, I got this $20,000 windfall from Uncle Joe and you know Uncle Joe would want me to, you know, blow it on a motorcycle, you know?
0:10:56 - Speaker 3
And if you really that's so weird, because I was just thinking motorcycle. Well, you really, so yeah.
0:11:01 - Speaker 2
Yes, Maybe that's true. Maybe your Uncle Joe really would want you to do that right. But find that happy ground, in case the other party in your life, your better half, so that is that they're going new, let's not do that, or let's find that middle ground and then also it could be an awkward conversation if it is you know your parents that you received inheritance from you know yeah, right, it's my parents so that your spouse may feel uncomfortable even saying anything.
0:11:29 - Speaker 3
So it definitely is a touchy subject. So having maybe a third party too, a neutral third party, to mediate is certainly helpful, not a bad idea.
0:11:37 - Speaker 2
Yeah, that's true, I could see somebody being a little snarky and being like, well, it was my Uncle Joe that left me the money, so what do you care, you know, kind of thing. So that's not. But anybody who's been married more than you know six months, well, no, that's probably not the best tactic to take. Anyway, All right, let's go to number nine, insurance. This one probably isn't nearly the pickle, the fight that you know. Some of the other ones could be sherry, because as we start to, especially, maybe it is when we're younger, right. So maybe it is when we're thinking, hey, we need to get the right amount of coverage for to cover the kids in case I, you know, had a heart attack at work or something and you know pay for colleges, whatever that case is. But as a retiree, possibly, depending again, depending on where you are in life insurance, you know you may not, you may not need it, maybe, possibly.
0:12:24 - Speaker 3
Here's my thing with insurance If you pay for it and you never use it, you're the winner in the end in every situation. So if you have by term life insurance and you it was a 20 year term policy and your family never had to call the insurance company and say we need the death benefit, you're the winner in the end. Right, long term care If you had a long term care policy and you peacefully died in your sleep, you're the winner in the end because you never had to exercise it. So it's to protect you in the case of things happening, but it's usually not good things happening to you. So I would say, if it makes you feel more comfortable at night, sleep better at night, to have that term policy, then get it, because that's you. There's no cost to feeling comfortable or feeling you like. You have protection, especially when one spouse works on the other dozen. A common practice is well, let's just ensure the the one that works outside of the household and has a salary.
0:13:24 - Speaker 2
0:13:24 - Speaker 3
But what if something were to happen to, in most cases, the mother that's home with the kids? Think about all the things that she does throughout the day that essentially, the father would have, would have to outsource which is very expensive.
0:13:38 - Speaker 2
That's a great point. Actually that happens to some friends of ours. Her sister there, she was only like 27 years old, I think. She was sitting there having breakfast and had an aneurysm and died and the father, you know, obviously wound up scrambling, you know, in the coming weeks and months trying to figure out, you know, going through the grief process clearly, but also at some point was just hit with the realization of I've got to go to work and who's going to watch the three little kids?
0:14:02 - Speaker 1
right, because they had three little.
0:14:03 - Speaker 2
I think they were all under like seven or something like that. So, yeah, that's a great point. We don't often think about that, especially when we're younger. Right, we kind of think, well, let's, let's ensure the the paycheck, if you will, but the person at home, it's almost immeasurable, but is immeasurable really I mean we can put a price tag on it when you, when you outsource it to daycare and you know lunches and things of that nature.
But there's so many immeasurable things that you can't put a price tag on. Yeah, absolutely okay. And then the final one, and this is just financial management. So in what you do, sherry, the point of contention could be, especially the last 10-12 years, when the DIY movements and just about every walk of life have gotten bigger and bigger is one party in the relationship saying, hey, we really need to turn to a pro. I'd feel better having somebody who really knows what they're doing. You know, help us with our forever money. And the other person say, nah, you know, we can do it, we can figure it out, let's. Why pay them? Let's just save the money. There's so many resources out there, let's just do it ourselves.
0:15:02 - Speaker 3
Yeah, I mean if, if you say I can do it ourselves and your situation you don't take the steps to improve your situation, then maybe you can do it yourself, but you're not. So you might need just that kick to get you to start doing things that that you need to improve in your financial health.
So it might just be as much as an account of someone holding you accountable. So, coming up with these plans, working through these awkward conversations of insurance and you know, wills and all this stuff, having those conversations, walking you through it and getting it done versus yeah, there are some things you can do yourself when it comes to your finances, but we use professionals for so many different things and it's because one they come with no emotions, they have their expertise and they can come in and give you advice and perspective that you may have never even thought of before.
0:15:57 - Speaker 2
Yeah, that's a good point, you know, and thinking about it this way too in my thought process is if you're choose, oh, we got the hello.
0:16:04 - Speaker 3
Yep, joey's here with me. He wants to be on the podcast he does.
0:16:09 - Speaker 2
You know if, if you decide to make that decision, let's say you push your spouse in to know we can do this ourselves, and then you make some bad decisions, right? Think about the compounded fight, you know, or how detrimental that could be, not only your finances but your relationship, right? So it may not be worth taking that route, especially when in the especially in the realm of, I guess, of retirement Sherry, because, as we've talked about a bunch of times, the accumulation phase, it's a lot easier to do the DIY thing, to grow it right. But you do really not want to make mistakes on the way down the mountaintop, right?
0:16:41 - Speaker 3
That's right. That's right. Accumulation is easier, right you? We can pick some. You can pick some investments in your 401k, continue contributing to it and you're going to have a nice nest egg. Generally speaking, right. But decumulation is very different than accumulation. And then also, when it comes to retirement, there's just a lot of questions and questions that you may not be able to answer. So why you? That's why you need to have a professional come in to help you with it and just give you that confidence. I think it's really just giving the confidence to say I can do this, it's going to be okay.
I can make some decisions and move forward in the next chapter of my life.
0:17:20 - Speaker 2
Yeah, I think that's a great point.
So these are some you know, top 10 items well, not top 10, but just 10 items in general over the last two podcasts. That can certainly cause financial stress between couples and result in some tension there. So check out both of these, if you've not done so already, and have a conversation. It all starts with having a compromising conversation, a polite conversation, whatever that might be, with your significant other, because I think often anyone who's again been married for a while sometimes we know that we might answer our spouse with a you know something they want to know, but we maybe don't go into it as deeply as we'd like because we're we fear a fight. So therefore we kind of maybe skirt the issue or not as truthful as we should be, and sometimes working with an advisor also helps break that middle ground, that middle tension point as well, because you've got that third party mediator there. Not that it's your job, sherry, to be a marriage counselor, but you know as well as I do that you kind of wear that hat often as well.
0:18:12 - Speaker 3
So yeah, and also and sometimes, if you're doing the right things, an advisor will tell you that as well, just like when you go to the doctor and they say everything looks great in a year. A financial advisor can certainly do that as well. You've done a great job. You're on the right track. Let's meet when you're getting closer to retirement or have a big life change coming up and let's see if I can help you there.
0:18:34 - Speaker 2
That's right Case. Uncle Joe leaves you that money for the motorcycle.
So, all right, that's going to do it this week for the podcast. Thanks for hanging out with Sherry, myself and Joey, and we'll catch you next time here on Money Chic Women in Finance. Don't forget to subscribe on Apple, google, spotify, whatever podcasting platform app you like to use. Stop by her website as well. If you've got some questions or concerns at GreenwayWealthAdvisorycom, of course, you can find all the information there, as well as the podcast, and share it with others who might benefit from the message as well and might enjoy the content. Greenwaywealthadvisorycom that's GreenwayWealthAdvisorycom For Sherry. I'm Mark. We'll catch you next time.
Shari helped my husband and I consolidate our finances and create a system that works for us. She is a great listener and very authentic - we are thrilled to have this trusted advisor on our team.