The Tax Cut and Jobs Act of 2017, which became effective for tax years starting in 2018, significantly impacted many taxpayers. The change impacting the most taxpayers was the enhanced standard deduction and loss of many itemized deductions. Tax forms were also presented differently making it difficult for taxpayers who reviewed their returns in detail to compare year-to-year. While there were many changes, there are still some important tax savings strategies that may help you pay less in taxes. Which ones apply to your situation? Ask yourself the following questions…
Atlanta Financial Blog
Marriage-Killing Money Issues
Divorce can be one of the most painful transitions an individual or family can experience. And once the litigation is done, family members often continue to suffer. Adults often experience a decline in their physical and emotional well being, with a heightened rate of stress-induced illnesses, depression and a loss of identity and social connections¹. Children often suffer in less obvious ways, with educational and adjustment problems in early childhood, and emotional problems related to the divorce increasing in young adulthood². Many couples fight hard for their marriage and family, but simply aren’t able to overcome their differences. What are the top causes they report for ending their marriage? Most of us know infidelity tops nearly every list as the most common reason, but problems related to money and financial stress is nearly always listed in the top five reasons reported. In fact, individuals who report arguing about money once a week have a 30% higher chance of divorcing. But, is the root cause of these divorces not having enough money? If that were the case, getting a divorce definitely seems like an illogical solution, since each party will end up with half (or less) of what they were already arguing about to begin with. So what is really going on when couples cite “money” as the cause of their divorce? And if you are married, and find finances adding strain to your marriage, what can you do to avoid joining the ranks of those who divorce?
The answer depends on which of the following causes of financial stress you see playing out in your relationship with your partner:
“There’s just not enough” – This may seem like a straightforward problem to solve – if there isn’t enough money or income, one or both partners could/should simply work together to increase income or cut spending, right? The couples who struggle with this issue, however, often fall victim to the “blame game.” Instead of working together to solve the problem, one partner (or both) may place blame on the other for not earning enough, not “doing their share” for the family finances, or for unrealistic spending habits or expectations. Finding a way to communicate directly without blame about the stresses and fears one or both may be feeling about the family finances is the place to start. Recognizing the different messages each partner received about money growing up can help too. Did your family fight about money? What did your parents teach you about money? Or did they avoid talking about it altogether, so you have never seen couples work through financial strains in a healthy way? If you’re replaying an old script and want to find a way to write a new one, this is often where a professional marriage counselor can help. Once the emotions de-escalate, a financial advisor can then help you construct a plan to get back on track.
“We just can’t agree” – If you are struggling to agree on how to spend your money today, start by each of you creating your own “spending list.” Put dollar amounts and rank all the possibilities in three groups: must do/have, would be nice to do/have, and least important/can wait. Then share and discuss your lists. Compare the top priority items for each of you, and then total your income and funds available. Once everything is down on paper in black and white, you will likely find out you are much closer aligned than you expected or feared. The items to cut may jump out to both of you. You will likely still need to compromise, but you each should at least feel heard and be more likely to engage in the needed give and take.
“We don’t know where we are going” – Even when by every objective measure there seems like there should be enough money, many couples still experience stress about what to do with the money they have. Should the unexpected inheritance go into savings or toward a second home? Should they give more to charity? Pay for an Ivy League education for their children or save more for their own retirement? Travel more in retirement or start college savings plans for their grandchildren? The choices can seem endless. When couples don’t agree about what money should do for them, having “more” can simply make the problem worse, as one partner feels financial freedom to depart even further from the path his or her partner is advocating. Have you and your partner discussed all the different things you could do with your money and agreed on priorities? Start by remembering “more” doesn’t necessarily increase or “buy” happiness – a concept covered in a previous article³. Creating a long-term vision and game plan can be even harder than managing short-term spending. Without professional guidance, it often just isn’t clear what is really feasible and what trade-offs might be needed. This is where we most often are engaged to assist. For example, I recently worked with a couple to help them understand that the retirement he dreamed of and the second home she wanted were both possible. So he can now set aside his fear that they won’t be OK in retirement and enjoy the hunt for the second home. But sometimes the answer is that the couple needs to make some tough tradeoffs. Start by understanding all of your financial options and the long-term impact each course of action. With guidance, you can come together with a plan both of you can get behind.
“Who should do what?” – Sometimes money troubles aren’t about cash flow being tight or not having a common vision. Sometimes it’s about communication and roles. Does one of you handle all family finances and the other feels “in the dark” about what is going on? Or have you divided up the financial duties in a way that seems fair and speaks to each of your individual strengths? Is one of you better with details and making sure bills get paid on time? Is the other one more willing and able to look at the big picture? Do both of you detest time spent on finances and just need to take turns with the most dreaded duties? Or should you “outsource” some or all of your financial duties to keep things on track? Having a financial advisor provide an objective analysis of what is working and what isn’t, and then offer solid solutions can de-escalate tensions. But it is critical that both of you understand and participate in the analysis and planning for your future. When one partner is handling all the planning on his or her own, even with the help of an advisor, a power struggle and resentment can ensue. Protect your financial future by participating fully.
If your marriage is facing financial stress for some of these reasons, start by understanding the underlying issue(s). Seek the help of outside professionals (qualified therapists and/or financial advisors) to help you and your partner see your situation objectively. Engage a financial advisor to understand where you are and arrive at a common vision you can both support. While our DivorceFIT™ process is designed to guide our clients through the process of divorce when it is inevitable, we take even greater satisfaction in helping couples work through periods of financial stress and emerge stronger as a couple for the challenges. If we can help you or someone you care about conquer financial fears and frustrations in your marriage, reach out to us today.
³ Check out “CAN Money Buy Happiness?”
Divorce can be one of the most painful transitions an individual or family can experience. And once the litigation is done, family members often continue to suffer. Adults often experience a decline in their physical and emotional well being, with a heightened rate of stress-induced illnesses, depression and a loss of identity and social connections¹. Children often suffer in less obvious ways, with educational and adjustment problems in early childhood, and emotional problems related to the divorce increasing in young adulthood². Many couples fight hard for their marriage and family, but simply aren’t able to overcome their differences. What are the top causes they report for ending their marriage? Most of us know…
We’ve all experienced this in one way or another: the paycheck lands, we think that we have recommitted our mind to being thrifty and frugal, but then something (or someone, reflection in the mirror included) happens to derail the process. We know it is necessary. We understand the benefits. But it isn’t fun! YOLO, right?! Sure, denying ourselves today the zeal of instant gratification is NOT enjoyable, but it IS responsible.
Whether you are just beginning the “adulting” journey and are trying to get a handle on what having personal, financial accountability means, or you’re a cashflow veteran and you’re pushing forward with a much needed over-haul of your money management repertoire, these 5 tips are essential to remember when taking command of our favorite 6 letter curse word… the BUDGET…
Recently, I ran across an article about the best (and worst) states for retirement. It caught my attention because the “best” state turned out to be …. Nebraska! Many would be surprised at this. After all, who would retire in such a cold place in the middle of the country? Actually, I was not at all surprised. I was born in Lincoln, Nebraska and spent the first twelve years of my life there. I still visit relatives in the Cornhusker state and enjoy the wonderful people, slower pace and beautiful scenery the state has to offer.