I serendipitously met Yulin Lee at an after party at FinCon. I was fascinated by her career and business. She runs Project M, where she coaches women through hard financial times. She has managed to create a career she loves while simultaneously serving others. It’s a mission that touched my heart, as I’ve seen the devastation things like divorce and death can impart on your finances. As if grief weren’t enough, financial hardship compounds these situations in a real and sometimes terrifying way. Today, Yulin teaches us how to get acquainted with our finances now, when things are good, so that we have less stress, learning, and worries to handle should the unthinkable happen.
While money is often a socially sensitive subject in many cultures, it is still surprising to encounter how many couples don’t really talk about money even at home. When I say “don’t talk about money”, I mean in a sense of discussing it in a deep philosophical and emotional way. What’s the point? Well, many couples go into a relationship with their own set of deep rooted values and subconscious emotions attached to “money” without realizing how different they may be from each other. Those differences could eventually creep up at the most unfortunate times.
As a Personal Finance Coach for women, I can’t emphasize enough of the importance of women being actively involved in their household finances. Creating that awareness and spreading the word is one of my top priorities because I have witnessed many women struggle and suffer tremendously as a result of not being prepared and equipped with financial knowledge, skills and savviness when a hardship hits. Whether it’s a divorce or an unexpected death of the spouse, compounding the logistical nightmare of a broken relationship or a loss of a loved one with the sudden financial pressure can be extra devastating.
Here are some simple tips on how to be more financially involved and ultimately more financially savvy:
- Create an open dialog with your spouse about household finances. If you are currently not involved at all (other than managing day-to-day expenses), then the first place to start can be the household budget. If your spouse has a budget, review it and ask yourself “Am I comfortable with the current income, expense and savings allocations?” If there is no household budget, help start one!Depending on the relationship dynamics, if you’ve been married for a while and have never being involved in household budgeting, it may feel awkward to bring up the subject with your spouse all of a sudden. One way to break the ice is to have a conversation about planning for retirement, and see how you two are working towards that goal. This is a very important step because it is also where you can start to explore and notice if there are any fundamental differences in your attitude towards money.
- Know where you stand and get your baseline by reviewing and understanding your tax returns. They can give you a high level picture of your total household income, assets and tax liabilities. Attend the annual meeting with your tax accountant with your spouse if you haven’t been doing so.
- I always say that saving is important, but we can’t save our way to retirement. We need to invest our savings to build a solid financial future. If your spouse has been doing investments, ask him how chooses the specific investment products, and then ask yourself: “does his investment philosophy align with mine?”
- If you have children, have a conversation with your spouse about what kind of money habits and values you would like to instill in your children. Remember, everything we do, we are modeling for them. In a case where the couple has vast difference in their money habits or philosophies, it can be very confusing for the children. Get in sync as parents and help your children build a positive and solid foundation around money.
I understand that for some, this list can seem intimidating. Just the words “tax returns” can turn many people away. My best advice is to Start Small, one small step at a time. More importantly, create a routine where you do a financial check-in with yourself on the regular basis. You can start with just once a month. Make an appointment with yourself on your calendar to sit down and review your budget, monthly bank statements, investments and financial goals. Think of it as going to a gym to build and maintain your financial muscles.
I sincerely hope that if you are happily married and are reading this, you will please know that this article was written with you in mind. I know that we learn best when we are in a good shape, and feel good about ourselves. By being proactive in financial affairs when you are not in crisis, you are giving yourself the gift of self care.
If you are currently going through a life hardship like a divorce or a loss of loved one, my heart goes out to you, and I want to tell you to remember that you are not alone, even if the world around you seem to be all falling apart. Reach out for support, help, a shoulder to lean on! We are in this world together.