Financial Checklist for Newlyweds

Just tied the knot? Or getting ready for the big day? First off, congratulations are in order! Secondly, it is probably time to start thinking about the financial steps you and your partner need to take to make sure you’re legally and financially starting off on the right foot. 

Financial wellness can oftentimes be difficult to achieve on your own, so adding another individual into the mix can tend to complicate things a bit. This is why it’s so important to communicate with your partner, be proactive, and take the steps necessary to seamlessly transition into your new life together.

Below we will list some newlywed legal and financial considerations to think about when taking those next steps with your significant other.

  1. Changing Your Name 

In today’s world, you may not be interested in changing your last-name and accepting your partner’s name. But whatever you decide, you’ll need to make your new name legal as one of the first tasks of married life. If you’re changing your name, you won’t be able to set up a new joint bank account, get a passport, or put your name on a joint house title without updating certain legal documents. Once your name change is official, there are institutions and documents you will need to notify or update, which include employers, including benefit, payroll, and W-2 documents, Banks/Financial Institutions, Insurance Companies, Utility Bills, Doctor/Dentist Offices, Professional Licensure, Professional Associations, Educational Institutions, Estate Planning Documents, Social Media Accounts and more.

    2. Merging your Money

Once you’ve taken care of any necessary name changes, it’s time to make some decisions about how your new household will merge and manage your personal finances. There are many ways to handle this, including keeping separate finances, combining finances, and developing a system that involves both. It is important to communicate to understand who will be taking care of certain bills and expenses, and where the funding will come from. 

    3. Merging Insurance Plans

When discussing merging finances, don’t forget about combining insurances. Now that you are married, it could be cheaper to sign up for one partner’s health insurance plan and add the other as a spouse. 

   4. Setting up Beneficiaries 

Now that you are married, there is a good chance you will want to update the beneficiaries on any 401(k), IRA, and or taxable investment accounts you have. If you have a life insurance policy, be sure to change the beneficiaries there as well. 

  5. Property Titles 

Did you move into your spouse’s home or are yours after marriage? If either of you is moving, you may consider changing the house’s title to represent joint ownership, especially if one partner is helping pay the mortgage. You may also decide to put both of your names on your vehicles for similar reasons. Make sure you’re setting up ownership of your joint assets to reflect the combined payment.

  6. Budgeting 

One of the best gifts you can give your new marriage is the gift of financial transparency. While you may not be a fan of budgets, or may not have tried one before, consider budgeting as a way to start a solid financial future with your partner. It’s important to communicate and understand the financial means of your new situation with your partner. 

While these are only a few of the topics you should incorporate into your financial conversations, the best place to start is establishing strong line communication. Communication is key in understanding each other’s views and building a strong foundation together. We recently recorded a podcast with psychotherapist and consultant, David Pearl, discussing how to have uncomfortable and oftentimes difficult money conversations with your spouse. For any questions or direction on your newlywed financial situation, reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute meeting here.

5 Ways to Promote Financial Wellness for Your Family

At Sherman Wealth, financial wellness is a major core value that we strive to instill in not only our clients, but to everyone surrounding us. Financial wellness is a major player in living a happy and healthy lifestyle physically, mentally, emotionally, and financially. 

A good place to start when trying to enhance your financial wellness for yourself and your family  is goal-setting and habit-stacking. When you begin setting goals and creating habits, it’s amazing to see how quickly you can improve each part of your life. 

Below we are going to discuss five ways to work towards building a life of financial wellness.

Creating an Emergency Fund

First and foremost, we want to discuss the importance of establishing an emergency fund. It’s an incredible feeling to have money in the bank. In good and bad times, it makes you feel secure knowing that if things get worse you are covered. This is especially true when you have a home and a family to take care of.

To help your family feel some true financial wellness, sit down with your partner to discuss what amount of money you feel comfortable to set aside in case of an emergency. Determining how much to have in your emergency savings is completely personal and will be different for every single individual and family. For some, six months of expenses in cash sounds too conservative while others may prefer a year of expenses or more. Find what works for you and stick with it. Either way, having cash in the bank for emergencies is a smart move.

Designing a Family Budget

Tracking your spending is a huge part of building financial wellness, especially as your family begins to grow. As your life continues to get more complicated, often times, your spending begins to grow as well. A good tip to staying on track is to establish a healthy budget that makes sense for you and set time each month to consider the following:

  • Review our spending and budget from previous month
  • Plan out our budget for the upcoming month
  • Review our financial goals and track our progress on those goals

Additionally, this set-aside time allows you to discuss upcoming events and create a schedule for the month. Not only will you be budgeting your money, but you also will be budgeting your time. After all, they are both finite resources.

Technology is another tool to consider when becoming financial literate and well. Automating your finances allows you to aggregate and see all your data in one place at the ease of your smartphone. Automation will not only help you stay organized, but save you lots of time in the process. 

Investing Automatically 

A lot of the time we find that individuals are hesitant to invest. One of the main reasons is that they are waiting to make more money. This can be a slippery slope because as we make more, there can be a tendency to spend more as well.

This is where automating your investments comes in. This is the process of deciding how much you can allocate each month toward investing and automating it. If that’s $50 per month to start, great! And if it’s more, even better. If investing becomes an automatic habit, over time, it won’t even seem like a task anymore. As you grow, your incomes will grow, and so will your investment accounts. This financial wellness habit can get you on path to financial success. 

Giving with the Family

Giving back to the community is something near and dear to our hearts. It feels great to be able to give to family, friends, neighbors, and charities. When establishing your weekly, monthly, and yearly budget, if interested, think about allocating a percentage of your extra cash to your favorite charities. This is a great way to involve your children in giving back and learning about the community. From this act, you are teaching your children at a young age that giving is a part of financial wellness. When you’re giving, you’re putting goodness back out into the world.

Treat Yourself 

Treating yourself to the things you love is a very important part of financial wellness. If you have a passion for traveling or dining, you may be wondering how to squeeze a family vacation or some dinner outings into your yearly budget. When creating your budget, make sure to leave room for activities and adventures that make you and your family happy, and cut out elsewhere, including some of those unnecessary costs or subscriptions. It’s important to be able to find the right balance between saving for the future and enjoying it in the present. 

Ready to prioritize financial wellness in your life? You can get started with our financial planning software and a complimentary introductory meeting to get a holistic view of your situation. For questions or concerns, email us at info@shermanwealth.com

Ep. 34 Launch Financial- Inflation Impact on The Restaurant Industry with David Dennison

Hungry for some pancakes and bacon? This episode will get you craving! Join us this week as we are joined by David Dennison, Director of Operations at Original Pancake House. On this episode, David speaks about how COVID-19 shifted operations in the restaurant industry, along with the impacts of inflation on input costs. Let us know your thoughts and head to Original Pancake House for some delicious breakfast! 

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When Student Loan Payments Restart

We know the past year and a half has been quite the whirlwind, and as we approach summer and the economy continues to re-open, we want to bring light to some financial stress individuals may be facing.  Federal student loan payments are set to resume on October 1, after an unprecedented 19-month suspension that was put in place to provide financial relief to borrowers during the pandemic.

Borrower balances have effectively been frozen for more than a year, with no payments required on federal loans since March 2020, when Congress first authorized the pause as part of one of its first major Covid relief packages. During this time, interest has stopped adding up — saving the average borrower about $2,000 over the first year — and collections on defaulted debt have been on hold.

The relief is even more significant for those who work in the public sector and may be eligible for loan forgiveness after 10 years. They are still receiving credit towards those 10 years of required payments as if they had continued to make them during the pandemic, as long as they are still working full time for qualifying employers.

Both the pause on payments and interest waiver is automatic, but only applies to federally held loans. That covers roughly 85% of all federal student loans, including those known as direct federal loans and PLUS loans that parents have taken out on behalf of their children. It excludes some federal loans that are guaranteed by the government but not technically held by it. Generally, those were disbursed prior to 2010.

The pause on payments was initially set to remain in place for seven months but has been extended by both the Trump and Biden administrations. It’s unlikely to be extended again since the economy is rebounding. We have been following the recent news of proposals to President Biden to cancel debt for American’s and will continue to report as we learn more; however, for those with student loan repayments starting up soon, its important to start thinking about your financial situation and how that wil change as you begin this repayment. For questions about your financial situation or advice on tools to help organize and automate your finances, reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute conversation here.

Ep. 33 Launch Financial- The Importance of Credit and How To Begin Credit Repair with KC Cole

Join us on this week’s episode of Launch Financial as we are joined by VP of Work Perks and Community Development At Mid-Atlantic Federal Credit Union, KC Cole. On this episode, KC provides the audience with invaluable advice on how to establish a strong credit score, even as a college student, and how to work towards repairing your credit, especially if you have faced some hardships along the way. 

A little about KC, at Mid-Atlantic Federal Credit Union, she is responsible for creating, marketing and managing the credit unions Bank at Work and Financial Wellness Employee exclusive programs. She serves as chief liaison of community development for corporate sponsorships, community service programs and marketing projects. She has over 18 years of experience as a former licensed investment Advisor, Banker and VP Community Relations Manager in Montgomery County, MD, where she has partnered with a multitude of businesses and organizations. She is the recipient of several awards and recognition, which include the State of Maryland Larry Hogan Governor’s Volunteer Services Award, the Montgomery County Community Action Award for Partnerships, and the City of Gaithersburg Mayor and City Council Partnership Award.  

She is an active board member of the Coalition Advancement Financial Education of Montgomery County, MD (CAFÉ) and Holy Cross Hospital Health Foundation Member.

She is married with three athletic children who run track and play lacrosse, and in her spare time if any is left over, she spends it at the gym every morning at 6am!

For more information on your credit score or any topics discussed in this episode, let us know at info@shermanwealth.com. 

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How American’s Became 401(K) and IRA Millionaires A Year After The Pandemic

Even though the coronavirus pandemic is not quite over, many retirement savings accounts are back to pre-Covid highs. Retirement account balances, which took sharp declines almost exactly one year ago, have now bounced back entirely, according to the latest data from Fidelity Investments, the nation’s largest provider of 401(k) savings plans.

Despite recent losses in the market, from January 2020 to the beginning of May, the S&P 500 has had an annual return of more than 20%. This has taken the average retirement account balance to record levels, surpassing even the previous highs reached right before the pandemic. 

During this time, many more workers increased their contributions, more than any previous quarter, while a record number of employers also automatically enrolled new workers in their 401(K) plans. Additionally during this time, fewer savers tapered into their accounts to free up cash or pull from their emergency funds. 

Individual retirement account balances were also higher — reaching $130,000, on average, helped in part by a spike in tax-deferred contributions ahead of the May 17 tax filing deadline. Thanks to a bull market and the boost in savings, the number of 401(k) and IRA millionaires hit a record. 

The number of Fidelity 401(k) plans with a balance of $1 million or more jumped to a high of 365,000 in the first quarter of 2021. The number of IRA millionaires increased to 307,600, also an all-time high. Together, the total number of retirement millionaires has more than doubled from one year ago.

Inequality fueled by the stock market’s performance has been a hallmark of the pandemic recovery, marked by job loss for those at the bottom and soaring wealth for those at the top.  This so-called K-shaped recovery has split the nation nearly in half, with the wealthiest faring even better than before, while millions more have faced setbacks.

In an attempt to get yourself to these record highs, we want to share some great strategies to help you get there. As always, we recommend contributing at least enough to take full advantage of any employer match and opting into an auto-escalation feature, if your company offers it, which will automatically boost your savings rate by 1% or 2% each year.

401(K)

Then, start early and create a separate savings account with emergency cash that will help you if you ever find yourself reaching a set back. We are thrilled to see an increase in funds and savings amongst Americans especially given the hard year we have had.  If you have any questions about how to better your personal financial situation, please let us know at info@shermanwealth.com or schedule a complimentary 30-minute consultation here