Talking About Money in Your Household
The continuum of household financial responsibility is much like the front yards of the homes in your neighborhood. They can range from a complete mess to extraordinarily well-maintained.
However, unlike people’s yards, the level of a household’s financial cleanliness is not on display for the world to see.
Nevertheless, wherever a household’s finances fall on a continuum of messy to clean, some attention is likely necessary. Some households will need a complete makeover, while others will only require a regular maintenance plan.
Talking About a Touchy Subject. Difficult but Necessary.
Money is a touchy subject, and no one likes to be wrong or exposed. Furthermore, in the United States and other developed countries, societal expectations are that people are financially literate and their household finances are in good shape.
Unfortunately, financial literacy tests and surveys don’t support this notion. In the U.S., financial literacy is generally low and unevenly spread, mirroring broader socioeconomic inequality.
Fortunately, financial literacy rates are positively correlated with higher income and education levels. Therefore, high achievers are typically in better shape than the general population. That being said…
The Financially Literate Can Still Get Trapped
Being financially literate doesn’t mean you can’t get financially trapped by outspending your income with an extravagant lifestyle, over-speculating in your investment accounts, or being caught by surprise by an unexpected event(s).
As a result, if a household’s finances are a mess, it’s very difficult for the person responsible to discuss it and thus admit their shortcomings.
At the other end of the continuum are highly successful people with well-maintained household finances. They face a different, more complex set of issues.
These households are often over-confident about their prospects because they “don’t know what they don’t know” and risk becoming complacent.
If these successful households want to experience an even higher level of achievement, they’ll likely need to engage with professionals who are subject-matter experts.
Taking Your Finances to the Next Level
This commonly includes:
A CPA for tax strategy
An estate planning attorney
An investment advisor
A Certified Financial Planner® professional (CFP®) to pull everything together in a comprehensive financial and life plan
For entrepreneurs and business owners, this personal financial team needs to be fully integrated with your business planning team.
In most U.S. households with adult couples, one person has primary responsibility for money and finances. However, when putting together a comprehensive financial plan that incorporates the plans you have for your life, both partners should participate in the required meetings and conversations.
Decision-making won’t always be perfectly balanced, but the dominant partner must listen to the perspective of the passive partner.
Money and household finances are a taboo topic in many households for a variety of reasons. At Sandene Strategies, we enter our financial planning engagements without judgment.
Our goal is to meet successful, high-achieving people where they are and use our knowledge and experience to lift them up to an even better financial situation.
Your Future is Now