A Guide to Starting Family Financial Conversations

A Guide to Starting Family Financial Conversations

By Jeff Johnson I’ve been a close observer of the way families make, communicate and implement financial decisions for most of the last four decades. In that time, I have learned that many individuals and couples make family wealth and lifestyle planning decisions privately, then avoid discussing them with other family members because it’s an uncomfortable conversation. The family leader or leaders usually know it would be better, in many cases, to explain details, discuss issues, and secure commitments to and acceptance for the family’s financial direction. Clarity equals confidence, and being financially confident empowers a fuller life for all involved. Yet many, if not most, family leaders struggle to share the intimate specifics, fail to collaborate on decisions, or neglect to have reasonable and open conversations about a range of family wealth and life planning matters. In my experience, the reason for this is twofold. First, as I previously mentioned, it’s just plain uncomfortable (or, at least initially, easier to do nothing at all). Second, few people are trained to hold money discussions and just don’t know where to start or how to do it. So, you may ask, what exactly is involved in starting a constructive dialogue about your family finances and the decisions that affect them? Having worked with hundreds of families to meet their life and long-term financial goals, and based on my unscientific observations, here is where and how you might want to start your family’s next important conversation about money: 1. The late Stephen Covey, a legendary author and speaker, advocated planning by “starting with the end at the beginning.” Before sitting down for...
Making Harmony with Money

Making Harmony with Money

By Tad Gray Dear Erika and Johannes, There’s a saying that goes, “The cobbler’s children have no shoes.” It means that we parents don’t always share our professional know-how with our own children. But now that you’re on the cusp of your careers, I would be remiss not to provide you with some financial guidance. Over the years I’ve been proud to watch you two grow to a remarkable level of artistry, and it has reminded me of all the joy I got from making music when I was younger. I’ve loved watching you from the audience just as I’ve loved the opportunities we’ve had to make music as a family. You’ve each demonstrated so much discipline in the pursuit of your craft. And I want you to know that that same discipline is all you need to manage the more practical sides of your artistic careers. As you know, I stopped pursuing music professionally when I was 23 – not much older than you are now – in favor of focusing on business. While I don’t regret that decision, financial concerns were an important part of it, so I’m sensitive to the challenges you’ll face. And since your mom continued her own musical career, I have remained connected to the economic reality of a musician’s life. If there’s one thing I’ve learned during my career in finance, it’s that your mindset is one of your most important tools. You know this is true for music, too. Just as our performance improves when we become more aware of our full selves, so does our relationship with money. With the right...
Important To-Do’s Before Sending Your Child Off to College

Important To-Do’s Before Sending Your Child Off to College

By Ken Rosenbaum The day has come. Your little baby has grown up and is now ready to leave the nest. He or she has graduated high school and the next big step is awaiting. Whether it’s college, a gap year, a year abroad or any other life adventure lies ahead, this time can be filled with much emotion for you and your child. As departure day gets closer, you’re probably focusing on last-minute shopping lists and feeling overwhelmed with trying to get everything done in time. Of course, you have already visited Walmart, Target and IKEA for the dorm room basics, purchased the new computer (yes, that is a 529 College Savings Plan qualified expense), figured out the move-in logistics, and coordinated with the roommate about who will bring what. Congratulations, you are well on your way. However, you might not be finished just yet. The following are six important tasks you may have overlooked. Make an appointment with your attorney to create a durable power of attorney document for financial matters and a health-care proxy. Without them, in most states, you, as a parent, don’t have authority to make health-care decisions or manage money for your children once they turn 18. That’s true even if you are paying the tuition, have your child on your health insurance plans, or claim your child as a dependent on your tax returns. Without such documents in place, if your child is in an accident and/or becomes disabled, even if only temporarily, you might need court approval to act on your child’s behalf. Establish a monthly budget for your child. The precise...
Cybersecurity Insights: Protect Your Child’s Identity

Cybersecurity Insights: Protect Your Child’s Identity

By Jared Hoffman Protect the young person you love. Many under the age of 16 don’t have much money, a line of credit or even a job. Cybercriminals don’t care. They have made this group of youth their No. 1 target for identity theft. In this video, cybersecurity specialist for the BAM ALLIANCE Jared Hoffman explains why children are targeted, offers some warning signs that a child’s identity has been compromised, and shares preventative steps to keep this from happening to a young person you love. To view original article click here. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. The opinions expressed by myself and other featured authors are their own and may not accurately reflect those of Lifeguard Wealth. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice. © 2018, Lifeguard Wealth As always, if you have any questions please contact Lifeguard...
Who Will Raise Your Kids If You Can’t?

Who Will Raise Your Kids If You Can’t?

Michael J. Evans, Founder, The Cogent Advisor, 6/3/2015 Who will raise my kids if I can’t? This is a huge and unthinkable question. So it’s no wonder that I frequently hear a multitude of excuses from family, friends and clients – all the parents of young children – who have not yet set up their essential estate plans. Often, the hurdle isn’t finding the right lawyer, or spending the money to get it done. It’s making that gut-wrenching decision about who to designate as the guardians of your minor children in your stead. As unpleasant as the task may be, the consequences of postponing it are worse. In the absence of carefully prepared estate-planning documents with proper designation directions, you’re effectively leaving it up to a judge to decide what is in the best interest of your children, without your input. If you’re facing this sort of wall in your family’s estate-planning process, the following steps may help you make the necessary leap from best intentions to appropriate action. Get Ready: Creating Planning Momentum First, list the people that come immediately to mind as the most likely candidates. Go with your gut, because your first instincts may well be the right ones. Next, narrow down your choices by considering the key questions listed below. For now, don’t try to come up with THE right choice (unless it’s no-brainer obvious). Simply take note of the advantages and disadvantages for each possibility. If you are a couple, think about these questions individually before coming together to share your answers. Are they young enough? Your parents may already have a track record...
Is a Million Bucks Enough to Retire?

Is a Million Bucks Enough to Retire?

By Tim Maurer “Wow, those guys must be millionaires!” I can recall uttering those words as a child, driving by the nicest house in our neighborhood—you know, the one with four garages filled with cars from Europe. The innocent presumption, of course, was that our neighbor’s visible affluence was an expression of apparent financial independence, and that $1 million would certainly be enough to qualify as “enough.” Now, as an adult—and especially as a financial planner—I’m more aware of a few million-dollar realities: 1.  Visible affluence doesn’t necessarily equate to actual wealth. Thomas Stanley and William Danko, in their fascinating behavioral finance book, The Millionaire Next Door, surprised many of us with their research suggesting that visible affluence may actually be a sign of lesser net worth, with the average American millionaire exhibiting surprisingly few outward displays of wealth. Big hat, no cattle. 2. A million dollars ain’t what it used to be. In 1984, a million bucks would have felt like about $2.4 million in today’s dollars. But while it’s quite possible that our neighbors were genuinely wealthy—financially independent, even—I doubt they had just barely crossed the seven-digit threshold, comfortably maintaining their apparent standard of living. To do so comfortably would likely take more than a million, even in the ’80s. 3.  Wealth is one of the most relative, misused terms in the world.  Relatively speaking, if you’re reading this article, you’re already among the world’s most wealthy, simply because you have a device capable of reading it. Most of the world’s inhabitants don’t have a car, much less two. But even among those blessed to have enough money to require help managing it, I have clients who...
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