Look for A Money Mindset Compatible Partner before You Think About Getting Married

Are you thinking of getting married? It might seem the easiest thing to do by signing a piece of paper and saying few words but when it comes to handling your married life, it can be sometimes tricky. A recent survey says that almost 50% of people get divorced and the most common reason is a misunderstanding due to different money mindsets. Marriage is not just between two people it’s between two different families- different in mindsets, lifestyle etc. Before you finally decide on marriage, it’s essential to ask each other few questions during the courtship phase so that you can know how this relationship would work in future.  The questions you ask before marriage can be the foundation of a workable relationship and help you in understanding each other’s perspective on various aspects such as finance, future plans, commitments etc.

Look for A Money Mindset Compatible Partner before You Think About Getting Married

Money Vs marriage:

Money is an essential part of our life and equally important part of a successful marriage as well. Most of the clashes in a marital relationship happen because of financial misunderstandings.

[highlight]“Money is the biggest cause of friction in a Marriage.”[/highlight]

~David Woods

As money issues are one of the key aspects of a broken marriage, it becomes necessary to know and clear views as early as possible. We all are well aware of the fact that successful marriage comes with compromise and the willingness to adapt each other as they are. The courtship period is the most interesting phase of our lives, it is the time when the heart starts pounding and the brain goes into hibernation. We all flow with the river of emotions and sometimes forget to do what is more essential- check your compatibility.

Money is the strength, for some, it is their weakness. Different people have the different perspective about money. So, it’s important to know if you’re money mindset compatible with your would-be. Hence, before you make finalize on making the partnership legal and tie the wedding knot, it makes sense to know his/her financial view and see how it matches with yours. In the initial phase of a relationship, few couples find it difficult to combine assets. As they wouldn’t like to be accountable or neither would like the idea of someone scrutinizing their spending decisions. Watch out for such behavior, it can be warned for a clash in the relationship in future.

So, wear your thinking caps ask thoughtful questions to your partner, and carefully observe the answers to know their views. There is rarely any chance that their perspective might change after marriage.

We share with you 10 important things to look for in your future spouse to figure out his/her financial intentions and money habits.

10 Important aspects to consider:

  1. Does your future spouse find it difficult to talk about money?
  2. Was there an open conversation about money matters in their family?
  3. Are your future in-laws financially stable? No, that doesn’t mean you’re checking their bank balance. But you need to know if they’re financially unstable, to be prepared for the future to take care of their financial needs as well.
  4. Take a note on the spending habits, is it thoughtful or careless? This can give you a clear insight into how they manage their money.
  5. Ask about a goal they achieved- know the details of how it was like, how did they achieve it?
  6. Any allowance ever received and the way it was spent or saved.
  7. Ask if they ever faced a failure and how they dealt with it. (As it is an important aspect: “Resilience is an essential part of a successful future.”)
  8. Share real-life instances (good or bad times) and the role of money in it. Know their plot as well and understand the views.
  9. Listen for comments about the bills in collection, any late payments or any debts.
  10. Listen to the views about work, future plans etc.

Summing up:

Marriage is a beautiful commitment. By knowing each other’s view on important aspects of life can make your relationship healthier and long-lasting. So, before you take your wedding vows, know your partner and his/her views well. Hope the above-mentioned questions would help you to get started with what to ask your partner before marriage.

[highlight]“Communication in a relationship is like oxygen to life; without it… it dies.”[/highlight]

~ Tony Gaskins

In this modern era, where everything is materialistic, you would be the last one to have a materialistic relationship as well. Today, so many marriages end in failure due to varied reasons and money doesn’t have to be one in that list. You can talk your heart out and have a healthy conversation to understand your partner’s financial history and mindset, this way you make your way into a long-term relationship.

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Americans Are Spending More Money after Their Retirement

How much are you spending post-retirement?

Most people think that they will spend less money after they retire and hold back any unnecessary expenses. In reality, people spend more, at least in the first few months as they are not aware of the regular expenses to expect.  Economists at the Investment Company Institute (ICI) and the Internal Revenue Service (IRS) analyzed the tax data and created a report, which shows that after claiming social security; more than half of the taxpayers are spending more during the first three years. The analysis report by ICI shows that Americans maintain or increase spendable income after they claim their Social Security. Nearly 90 percent of the Americans hold or have income from employer retirement plans, IRAs or annuities, says the report.

Americans Are Spending More Money after Their Retirement Spending habits define how well you handle your finances. While you’re working, you will have great plans for your retirement on how much to spend and save for a comfortable living. But in reality, it doesn’t work with a plan. It takes time to analyze our expenses, and then you can follow a routine to cut down over spending. And so, you plan well & save more for the retirement and you can take control over the expenses post-retirement. But this doesn’t mean spending won’t slow later in retirement, researchers said.  People with different income margins have different spending habits. The three categories of people with their spending habits:

Category 1: People with lower income

Everyone has big dreams for their retirement. Some people plan well in advance to achieve those dreams. Before retirement, we all calculate and create a budget to follow when we retire. But does everyone abide by the budget? A survey says that people with lower income spent more than they were before retirement. The survey was based on the income left after taxes and not the actual spending count. The lower-income earners were more dependent on social security benefits than the retirement income. The survey report and its components: The researchers stated in the report: “For many individuals, retirement appears to be a multi-year transition rather than an action taken at a discrete point in time.” The report by Investment Company Institute economists (ICI)was made keeping in account the following factors:
  • Salary and wages
  • Social security benefits &
  • Retirement income (distributions from employer plans (401(K)), annuities & IRAs etc.)
  • Pensions

Category 2: People with mediocre income

The survey says that people in the category of mediocre income also spent as much as the people with lower income. For people with mediocre income, social security plays a vital role post-retirement.

Category 3: People with higher income

On the other end, the people with higher income spent slightly less than the lower and mediocre income earners. The retirement income matters more to the higher-income earners than the rest. For the people with higher income, the benefits from the employer through 401(k) account would be high as well and so is the dependency on it post-retirement.

So, how to save for retirement?

With the fluctuating needs and expenses, you might feel it difficult to have a fixed goal when it comes to how much to save for your retirement. As there will never be a fixed amount for how much to save but you can have a fair budget to chase. The thumb rule: Instead of chasing a moving target, define your budget. The experts give you a thumb rule for how much to save for retirement, which suggests that most of the people devise to spend nearly 70 percent of their pre-retirement income (current income generated while working) in retirement.  Now that you have a tentative figure of how much you might need to save, the next question would be: Have you saved enough for your retirement? Few of us think that their spending habit will remain constant after retirement and thus can save a fixed amount to secure their future. But that’s not the case. Initially, you might not understand how to handle your expenses and where you can cut on the edge. One thing is that your spending could drastically fluctuate every year, especially when you are looking for a long time to retire (maybe 30 years or more). The report stated that most people claimed their social security at the age of 62 to get the benefits of it later. Also, there were a set of people (nearly half) who were still working 3 years after they claimed social security. For a bigger benefit, it’s better to delay taking social security and enjoy the benefits to the fullest. So, what is the right time to claim social security and enjoy the benefits?

Summing up:

Post-retirement you might feel that you would spend less and focus on the essentials alone. In the initial phase, you would spend for leisure as well. So, prepare yourself well in advance for your retirement to make it a painless journey.]]>

When Would I Use An EIN?

When starting a new business, there is a lot of paperwork and filing that you have to do to make sure that your company is recognized in the eyes of the law and the government. As far as documentation goes, one of the first thing you should do is get an EIN number, as this will create your business through the IRS, allowing you to file taxes as well as do a lot of other things. If you’re new to the concept of getting an Employer ID Number, then let’s go over when to use an EIN and why it’s important.

Get an EIN

How Do I Get an EIN?

The process for obtaining this number from the IRS is relatively simple. You fill out the necessary paperwork and submit it either via fax, through the mail, or online. We highly suggest going the online route because it is much faster than waiting for your mail carrier, and you can check your EIN status within hours. In fact, in many cases, you can receive your ID within a few hours by submitting online. You can also get your EIN over the phone after the IRS has processed your paperwork.

When Do I Use my EIN?

There are three primary situations where having an EIN is imperative. That is when you are filing taxes, opening a bank account, and applying for business licenses in your area. Another reason to have an EIN right away is that if you have any employees or plan to have any shortly, you will need your ID number to ensure that all of their paperwork is filed correctly and that you will pay the requisite taxes for those employees.

In the end, having an EIN is a crucial part of starting a new business as it will enable you to do everything you need to get up and running. So be sure to apply ASAP, so you don’t run into any obstacles on the way.

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How Does Americans Spend Money At Every Age?

recent survey shows that housing accounts for the maximum expense for Americans ranging from 30-35% of the monthly budget. How Does Americans Spend Money At Every Age

The career jump

We start earning at a very young age and thanks to part-time jobs, freelance etc. it fills the need to use it as pocket money. But the biggest jump occurs when we turn 25 and start getting a decent lump of dollars through a career. We tend to spend more on everything we wished to buy and there’s no urge to save at this age.

Age defines expenses!

Does age define how we spend? Yes, it does. A recent survey by the CNN shows that the there is a defined pattern of expenses for the different age group of people. monthly budget by age The above graph shows the monthly budget by age with reference to the survey by U.S. Bureau of Labor Statistics’ 2015 Consumer Expenditure. Let us see in detail where all the money is spent for different age groups and what the monthly budget is at the different age.
  • Under 25
This is the blooming age where we are free of responsibilities and can afford to spend on things that we love. Young adults at this age are relatively thrifty; know how to control their expenses and thus spend less than what their elders spend on most of the things. Young adults spend most of the money on education. Average monthly expense report: Housing:              $944 Transportation:  $527 Food:                    $408 Healthcare:        $82 Education:           $214 Entertainment:   $113 [highlight]Total(Average monthly family budget):                    $2733[/highlight] 
  • 25 to 34
This age group is termed as millennials where people start getting settled in jobs and have a stable career. People in this age group spend money in a sensible way, either to clear off debts or start saving money. Average monthly expense report: Housing:              $1525 Transportation:  $815 Food:                    $553 Healthcare:        $231 Education:           $94 Entertainment:   $216 [highlight]Total(Average monthly family budget):                    $4339 [/highlight]  
  • 35 to 44
This phase is termed as adulthood where people start having family and settle with kids. With the increase in the number of persons in the family, the expenses are expected to shoot up as well. In short, in this phase, people are struck with the highest food and housing costs with marriage and/or mortgage expenses. Average monthly expense report: Housing:              $1850 Transportation:  $912 Food:                    $737 Healthcare:        $323 Education:           $98 Entertainment:   $266 [highlight]Total(Average monthly family budget):                    $5445 [/highlight]  
  • 45 to 54
This age group is termed as generation-X when your kids start growing to teens and the expenses are at peak. When your kids start driving, your transportation costs are also expected to rise. As kids head to college, education costs also contribute to major part of monthly expenses. Average monthly expense report: Housing:              $1763 Transportation:  $982 Food:                    $701 Healthcare:        $389 Education:           $222 Entertainment:   $276 [highlight]Total(Average monthly family budget):                    $5813 [/highlight]  
  • 55 to 65
This age group is called boomer age where the income drops off and the expenses of food and transportation also set low. But there’s a rise in health care costs with age. Average monthly expense report: Housing:              $1516 Transportation:  $835 Food:                    $583 Healthcare:        $426 Education:           $97 Entertainment:   $277 [highlight]Total(Average monthly family budget):                    $4898 [/highlight]  
  • 65 & above
This age group is called the silent generation or the golden age. In general, older Americans tend to cut down all the expenses in almost all categories with an exception in healthcare. As we age, the health care costs contribute to the major expenses with more dependency on medical care and prescribed drugs. Average monthly expense report: Housing:              $1294 Transportation:  $571 Food:                    $459 Healthcare:        $480 Education:           $22 Entertainment:   $205 [highlight]Total (Average monthly family budget):                    $3722[/highlight]  

The effect of housing and healthcare costs with age!

With every passing age, the major difference in monthly expense depends on two major categories: housing and healthcare. The older we get, the more is the health care expenses. The effect of housing and healthcare costs with age

Summing up:

Sometimes things fall out of place and at unexpected times when you least expect any expense, you encounter a big expense report. Once you start earning, cultivate the habit of saving some money as emergency fund apart from your regular savings. Handling your money totally depends on how you take care of your expenses. It doesn’t matter what age group you fall into, planning ahead to reach your financial goals will be a wise move.]]>