USNFCU-Family Finance-Fall 2001

FAMILY FINANCE

Pooling Resources
Effectively manage your family's money by working together as a team.

t is not always easy for couples to learn to manage their money. While most experts insist there's no absolute right or wrong way to go about it, they advise: Do what's comfortable for you and your partner.

Still, broaching a conversation about anything financial can be tricky. As you explore issues of spending and saving, you may touch on sensitivities that neither of you knew existed. For instance, you may believe that having money empowers you to buy anything you can afford. For your spouse, it may mean having enough to put away for a rainy day. Both of you are right. But without a plan on how these beliefs play out in your daily lives, you may find yourselves at odds.

That's why having an honest and open conversation about what money means to both of you is the first step in establishing your family's financial priorities. The following suggestions can get you started:

Establish ground rules for all financial conversations. Agree to:

Approach all discussions with a can-do spirit and an air of mutual respect. Accept that it's okay to disagree as long as you talk things through. Realize that no one will get his or her way all of the time.
Schedule regular financial planning meetings, say, once or twice a month. Use this time to review immediate concerns. You'll also need to set aside some of these meetings-but not all of them-to track your progress in achieving your goals.
Initiate any important decision-making conversations before you have a crisis on hand. For example, if you know you may have trouble making a car payment, try to bring it up before the day the check is due. Together, the two of you may come up with a great solution that you alone never would have considered.

Identify your family's financial priorities-now and for the future.
Begin by separately making a list of your short- and long-term goals and when you want to achieve them-and then compare what each of you wrote down. You may want to consider:

Accumulating enough savings to handle an emergency.
Buying a house large enough to accommodate a growing family.
Developing a budget to get out of-and to stay out of-debt.
Ensuring that your aging parents are comfortable and well taken care of.
Starting a college education fund for your children.
Taking a nice vacation with your family at least once a year.
Investing with the aim of becoming financially independent in retirement.

Establish a savings and spending plan that both of you can live with.
If you already have some financial priorities, take time to review them to see if you are both still committed to the plan.

Your plan should help you meet your goals. For most couples that means saving at least 10% of your take-home pay. Work up to that amount if you need to, but be sure to develop and stick to a budget. Both of you must agree that saving is a priority if you plan on achieving a certain goal within a specific time frame. Experts agree that the best way to boost your savings is to put them on autopilot. One way is to instruct Navy Federal to allocate a portion of your direct deposit to your savings account. Or you can have money from your Sharechek® checking account automatically transferred into your savings each payday.

You'll also need to discuss where the savings will come from-and that often leads to identifying ways to cut back spending. Two relatively painless ways to get started are:

Agree to discuss all major outlays with each other before you start shopping. Don't make impulse purchases.
Consider taking vacations off-season when hotel and airfare prices are considerably lower. Also look for travel advertisements for places where children can stay free.

Develop or review your bill-paying system.
You may want to do this job together, so both of you know what's going on. Later, the person with more time, talent and interest in this task may want to take on the responsibility. But remember that the other spouse must be kept informed about the status of the family's finances. If one of you already is paying the bills, but not doing a good job, discuss changing the game plan. But first review the pointers we explored earlier in this article to make sure you have a productive discussion.
While you are putting your savings on autopilot, don't forget to check out automated bill-paying systems like Web Bill Pay on Navy Federal Online®. For a low monthly fee, you can set up automatic scheduled payments up to one year in advance for all types of bills. To find out more, go to www.navyfcu.org.