Information on Your Student Loans During the COVID-19 Crisis

The recent stimulus package recently passed by  Congress gives most federal student loan borrowers a six-month break from payments. It comes after a series of announcements by the U.S. Department of Education meant to alleviate student loan stress. The new law takes that relief even further.  The biggest break is that you can stop making payments on most federal student loans for six months — from April through September — and no new interest will accrue. That means, at the end of those six months, you’ll owe exactly what you did at the start.  Congress didn’t wipe out any of your student debt, but it gave everyone a six-month payment holiday, regardless of how much they have or haven’t been hurt by the current wave of layoffs and closings designed to limit the spread of the coronavirus.  In addition, the stimulus package expands on and supersedes earlier relief programs Specifically, here’s how the new stimulus affects your student loans, and what to do if you’re in each of the situations below.

1. If You’re Current But Likely To Fall Behind

Even if you are able to pay your bill currently, but you’re concerned about losing income or affording payments in the next few months, you should take advantage of automatic student loan forbearance starting now.  Use it to build an emergency fund so that you can put it toward other essentials like food and housing in the future if necessary.

2. If You’re Working Toward Public Service Loan Forgiveness

The stimulus bill updates certain details regarding Public Service Loan Forgiveness. If you don’t make payments until Sept. 30, those months will still count toward your Public Service Loan Forgiveness timeline. That means you won’t have to make payments for extra months, past the time you planned to get forgiveness so even if you can keep paying loans, it doesn’t make sense to do so. If and when you do qualify for PSLF, you’ll receive forgiveness on the outstanding balance without needing to pay income tax on the amount forgiven.

3. If You’re Current On Student Loan Payments And Your Income Is Secure

You don’t have to make payments right now, but since new interest won’t accrue, any payments you do make will be turbocharged. More of your payment will go toward your principal balance, helping you pay off the loan faster. If you’re not concerned about your income or shoring up savings at the moment, your best bet is to continue making payments while you can.

4. If You’re Behind On Student Loan Payments

Borrowers who were more than 31 days behind on their loans receive automatic forbearance and now your payments are automatically postponed until Sept. 30. You don’t need to ask for forbearance from your student loan servicer, but it’s a smart idea to check your online account soon to make sure they’ve updated their records. Interest won’t accrue during this period. 

The U.S. Department of Education has also announced that:

  • Collections activities will be paused, meaning you shouldn’t receive calls or letters about a federal loan in default that a private company is now collecting on.
  • The government will not withhold your pay, your tax refund or your Social Security payment — known as Treasury offsets — for at least 60 days if you’re in default, starting from March 13. 
  • If you’re in a rehabilitation program to get out of default, which requires you to make nine on-time student loan payments in 10 months, the clock doesn’t stop on your payment arrangement. Even if you don’t make payments for the next six months, those months will still be counted toward your rehabilitation timeline.

If you’re worried you’ll need help after the pause on payments has ended, you can sign up for an income-driven repayment plan to limit your monthly bill to a percentage of your income for as long as you need to. You’ll also get forgiveness after 20 or 25 years of payments, and you’ll pay income tax on the forgiven balance. 

5. If You’re A Parent With Student Loans On Behalf Of A Child

If you took out federal direct PLUS loans to help your child pay for college, these are included as part of the stimulus package’s relief offerings. That means your payments will be suspended automatically until Sept. 30. 

If you can continue to make payments, you’ll benefit from the fact that new interest isn’t being charged during this six month period. That means all payments you make during this period go directly toward your principal balance, potentially helping you pay off your loan quicker. 

6. If You Have Commercially-Held FFEL Or School-Held Perkins Loans

Only loans held by the U.S. Department of Education qualify for relief in the stimulus package, including the interest waiver and payment suspension. Loans from the Federal Family Education Loan (FFEL) program that are owned by private entities, and Perkins loans owned by colleges, don’t qualify. 

However, you can consolidate these loans into a direct consolidation loan in order to access stimulus benefits. Consolidating also lets you take advantage of income-driven repayment if you need it in the future. But if you have Perkins loans, that means giving up access to certain forgiveness programs for public service workers and other benefits. Weigh the pros and cons before consolidating.

7. If You Have Private Student Loans

The federal relief programs DO NOT apply to borrowers with private student loans. That means it’s up to you to call your lender and ask about loan modification programs, which many offer. 

If you’re at risk of falling behind on loan payments, request help from your lender as soon as possible. You can ask about options for reducing or pausing payments and waiving late fees. 

8. If You Don’t Know Where To Start

It is most important to know what type of student loans you have so you know whether you can confidently stop making payments or not. Most student loans are federally held, so if you’re unsure, start by signing in to StudentAid.gov with your Federal Student Aid ID, or create an account

If you know you have student loans but they’re not listed there, the loans may be private. All your loans will be listed on your credit report, so if not listed on StudentAid.gov, they are likely private. You can check your credit report for free once a year from each of the three main credit bureaus at AnnualCreditReport.com.

As always, if you have any questions relating to your student loans or any other aspects of your current financial situation, feel free to set up a call.

 

 

The $2 Trillion Economic Stimulus Bill Has Passed: Here is an Overview

On March 27, 2020, the White House and Congress came to an agreement and passed the largest relief package in recent United States history, called the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Spreading $2 trillion amongst businesses, hospitals, families and individuals, this economic stimulus package is designed to bring relief to those experiencing the ever-increasing threat of economic turmoil and downturn amidst the COVID-19 pandemic.

After six days of back and forth between Senate Republicans, Democrats and the White House, all parties came to an agreement on this historical $2 trillion package. For perspective, this relief package greatly surpasses the $168 billion offered to Americans in the Economic Stimulus Act of 2008, which was the last time an economic stimulus package was passed.1 

If you’re wondering how this newly passed act may affect you, your place of employment or your local healthcare facility, we’ve gathered up the important numbers to know in this overview.

Unemployment Benefits

In an effort to extend unemployment benefits, eligible Americans on unemployment will receive an additional $600 per week for four months.2 This is done in an effort to help those who are currently out of work due to the COVID-19 pandemic better achieve their full pay over the next four months.

This bill will allow unemployed individuals affected by the pandemic to receive unemployment insurance for an extended 13 weeks. In addition, it will allow out-of-work individuals to receive the enhanced unemployment benefits as outlined in this bill for four months.2

The bill has called for the creation of a pandemic unemployment assistant program that would offer unemployment benefits to those who have previously not been eligible – including those who have been furloughed by their employer, freelancers and gig workers (such as Uber or Lyft drivers).

Healthcare Aid

In the final iteration of the bill, hospitals will receive around $117 billion in aid.2 In regards to helping healthcare workers on the frontline of the COVID-19 pandemic, the bill is meant to help workers gain better access to protective equipment, testing supplies and provide construction or facilities to house the growing number of patients in need.

Additionally, hospitals and healthcare providers will see a 20 percent increase in Medicare payments for treating those on Medicare with coronavirus.2

Stimulus Checks

Some American taxpayers will be receiving direct stimulus payments of $1,200 as part of the new bill. Those with incomes up to $75,000 will receive the full $1,200, with the amount lowering and eventually phasing out for those who earn more than $99,000. Individuals earning $99,000 or couples earning $198,000 or more will not receive checks. Families who qualify with children can expect to receive an additional $500 in direct payments per child.2

To determine how much you will receive, the government will be basing your income level on your 2018 tax return, unless you have already filed your 2019 tax return.2 As a reminder, the tax filing deadline has been extended to July 15, 2020.2

Small Business Grants & Loans

A large portion of this stimulus bill will be going toward assisting small businesses who have been affected greatly by the COVID-19 pandemic. Overall, $500 billion will go toward assisting businesses and corporations, with $29 billion going to the aviation industry and $17 billion to businesses that work in national security. The remaining $454 billion can be leveraged as loans for other businesses or municipalities. Companies that choose to take this government assistance must agree to stop any stock buybacks for the length of the loan plus a year. In addition, these companies must retain at least 90 percent of their employee levels between March 24 and September 30, 2020.2

This money will be overseen by an inspector general and a five-person panel, who Congress will appoint. In addition, any businesses run or partially run (at least 20 percent stake in the company) by the Trump family, or other senior government officials, will not be eligible to use these funds.2

Education

Millions of educators and students from K-12 through college have been affected by government orders to self-isolate. In an effort to assist school systems and institutions across the country, the government is granting $30 billion in emergency education funding.2

In addition, The Department of Education will be suspending payments so that borrowers would be allowed to put off paying their federal student loan payments without penalty until September 30th.2

Airlines

Airlines have been hit hard during the pandemic and requested government assistance to help negate the crippling effects they’ve endured as a result. The relief bill will provide $32 billion in the form of grants to cover the wages and benefits of aviation employees.2

Here’s how the $32 billion will be broken down within the aviation industry:

  • $25 billion for passenger airlines
  • $4 billion for cargo airlines
  • $3 billion for contractors (workers who handle ticketing, cleaning, catering, baggage, etc.)2

Passenger airlines and cargo airlines will also receive additional help, $25 billion and $4 billion respectively, via loans or loan guarantees.2

In exchange for this assistance, the government has banned airlines receiving assistance from furloughing employees, making pay cuts, buying back stocks or issuing dividends to investors through September.2

Local Government

State and local governments haven’t been immune to the financial hardships this global pandemic has caused. The stimulus package is offering $150 billion for state and local governments that have been working to combat the effects of COVID-19 in their communities.2

Food Assistance Programs

Anticipating a rise in demand for food banks as a result of the increasing unemployment rate, the bill has provided the Emergency Food Assistance Program with $450 million. Approximately $350 million would go toward purchasing food, with the remaining $100 million spent on the distribution of food to those in need. In addition, Puerto Rico and other U.S. territories will receive $200 million for food assistance, and American Indian reservations will receive $100 million for food distribution.2

While the news seems to be changing every day surrounding COVID-19 in America, this stimulus act is coming at a time when families and business owners alike are fearful of their financial future. If you still have questions about how this stimulus package may affect you or your business, please click here to schedule a call.  Together, we can sort through expectations of what’s to come and the right next steps to take.

  1. https://www.congress.gov/bill/110th-congress/house-bill/5140/text
  2. https://www.congress.gov/bill/116th-congress/senate-bill/3548/text

A Guide to the Recently Passed Paid Leave Benefits Amidst Global Pandemic

To help prevent further spread of COVID-19, there’s a consensus that Americans need to stay home and adhere to social distancing practices. This is especially recommended if one feels sick or has a suspected or confirmed case of the virus. As directed by the Centers for Disease Control and Prevention (CDC), it’s important to self-quarantine and be mindful of personal hygiene, such as washing your hands and the like. Our health and the health of the nation is top of mind, but the question remains: will U.S. workers still get paid if they stay home?

Roughly 25 percent of U.S. workers currently receive little to no paid sick leave, many of which are low-wage employees who depend on their paychecks.1 On March 18, 2020, President Donald Trump signed the Families First Coronavirus Response Act, which intends to give paid leave to workers who did not have it and extend paid leave for workers who only received a few days. These benefits are only temporary, but they allow certain employees to receive paid leave if they need to take time off from work, due to the present virus.

Understanding the Families First Coronavirus Response Act
The recently passed bill allows qualified employees two weeks of paid sick leave if they are sick, quarantined or seeking a diagnosis or preventative care for COVID-19, or if they are caring for ill family members. Those who are caring for children whose schools are closed or whose childcare provider is unavailable due to the pandemic will be granted 12 weeks of paid leave.2

As long as you’ve been employed for at least 30 days, most employees of small and midsize companies, as well as nonprofit and government employees can receive paid leave. If you are a part-time worker, you will be paid the amount you earn in a two-week period.2 Alternatively, if you’re self-employed and pay taxes, you can also receive paid leave.

Who Is Excluded?
Employees working at companies with more than 500 people are excluded from these benefits. Those employed at companies with less than 50 employees are included, but the Labor Department is able to exempt small businesses if providing leave would put them out of business.3 Employers can also decline to give leave to those facing the crisis head-on, including emergency responders and healthcare providers.

How Will My Business Be Affected?
Companies with more than 500 employees will need to pay the cost of paid sick and emergency leave, but they will be eligible for reimbursement tax credits at a later time.

Businesses will be reimbursed up to $511 per employee, per day for paid sick leave wages paid to employees who must quarantine because they are sick with COVID-19 or are trying to receive a diagnosis. For those employees caring for family members, employers will be reimbursed up to $200 per worker, per day.3 Self-employed individuals are also eligible to receive reimbursable tax credits.

Those with fewer than 50 employees who are interested in applying for an exemption to the paid leave mandate because the viability of their business may be in jeopardy should reach out to the Department of Labor.

Are the Paid Leave Benefits Permanent?
The sick leave benefits included in the Families First Coronavirus Response Act will only last through December 31, 2020.3

When Does It Take Effect?
The recently passed bill was signed into law on March 18, 2020, and the paid leave provisions are expected to take effect within 15 days.2 As we continue to see global increases in illnesses and deaths, the United States government is being urged to continue on the path of providing for America’s workforce.

Guidelines will be issued for the Families First Coronavirus Response Act in order to assist employers in calculating how much paid leave their employees should receive. At that point, workers should be able to simply inform their employers of time off, take their leave and receive payment specified by the law.

1. https://www.pewresearch.org/fact-tank/2020/03/12/as-coronavirus-spreads-which-u-s-workers-have-paid-sick-leave-and-which-dont/
2. https://www.congress.gov/bill/116th-congress/house-bill/6201/text
3. https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

This content may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Highlights of Changes for 2020 Retirement Plan Contribution Limits

Great news for savers! The IRS announced today that taxpayers will be able to contribute $19,500 for employees who participate in 401(k), 403(b), most 457 plans and the Federal Government’s Thrift Savings Plan, up from $19,000 in 2019.  The catchup contribution limit for employees age 50 and over who participate in these plans has increased from $6000 to $6500.  

The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019.

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver’s Credit all increased for 2020.

Other highlights include.

  • The annual additions limit for defined contribution plans increases to $57,000.
  • The annual additions limit for defined benefit plans increases to $230,000.
  • The annual compensation limit increases to $285,000.
  • The Social Security Wage Base increases to $137,700.
  • The compensation limit for determining who is a highly compensated employee increased for the first time in five years, and is now $130,000.

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his or her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his or her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2020:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $65,000 to $75,000, up from $64,000 to $74,000.
  • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $104,000 to $124,000, up from $103,000 to $123,000.
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $196,000 and $206,000, up from $193,000 and $203,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000

The income phase-out range for taxpayers making contributions to a Roth IRA is $124,000 to $139,000 for singles and heads of household, up from $122,000 to $137,000. For married couples filing jointly, the income phase-out range is $196,000 to $206,000, up from $193,000 to $203,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $65,000 for married couples filing jointly, up from $64,000; $48,750 for heads of household, up from $48,000; and $32,500 for singles and married individuals filing separately, up from $32,000. 

The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

Details on these and other retirement-related cost-of-living adjustments for 2020 are in Notice 2019-59 (PDF), available on IRS.gov.

Financial Literacy And Educating Youth Locally

junior achievement blog image

As the United States continues to offer more and more financial education in schools, colleges, workplaces, non-profits and government agencies, only ⅓ of states actually require students to take a personal finance course in high school.  Even more alarming is the fact that less than ⅓ of adults understand three basic financial literacy topics by age 40, even though most of these adults are making difficult financial decisions at a much younger age. We all know the key to staying healthy is eating well and exercise, but it’s just as important to be financially healthy.   Financial literacy is the key to financial health, lifelong stability and wealth. 

Here in Montgomery County, many of our middle school students are fortunate to be able to participate in Junior Achievement Finance Park®. Junior Achievement is the world’s largest organization dedicated to educating students in grades K-12 about financial literacy, work readiness, and entrepreneurship, reaching more than 8 million students in 100 countries worldwide. In MCPS, the program reaches over 12,000 students each year and has transitioned to a 7th grade lesson sequence and field trip to the state-of-the-art JA Finance Park immersive learning facility at Thomas Edison High School.  At JA Finance Park, students become “adults” for the day with a career, salary, credit score and financial obligations that they must balance. 

In addition, a few MCPS high schools offer an Academy of Finance Pathway. The Academy of Finance connect high school students with the world of financial services and personal finances.  The curriculum covers banking and credit, financial planning, global finance, securities, insurance, accounting and economics. 

Programs such as these are a great way of putting our children in a position for financial success, however, raising our children to be financially aware is not just the responsibility of our schools. Starting at a very early age, children should be educated about how finances work – from creating a budget to learning how to save money for emergencies, teaching them the financial skills necessary to become responsible and self-sufficient adults is essential for their life-long success.  Each family is unique with their approach to handling their own finances and what their expectations are, but there are a few common tasks and principles that can help young children achieve the necessary skills for a solid foundation.

  1. Start with budget basics – Focusing on what money is coming in and what money is going out is key to making sure you don’t run out of money each month.  Creating a budget can also help you save for a big purchase and can develop the habit of putting money away for an emergency fund.  
  2. Learn to live within your means – Creating realistic goal setting and understanding “wants” vs “needs are key to developing mindful money practices.
  3. Build a solid credit score – Young adults need guidance in choosing their first credit card wisely as well as recognizing how to maintain a strong credit score.  This should include checking each credit statement thoroughly, paying off the balance monthly and understanding compound interest.
  4. Earn while you learn – Becoming a smart investor also takes time and you don’t need to be an expert to grow your wealth.  Some important lessons in reaching financial independence include learning to pay yourself first, staying in for the long term and diversifying your risk.  
  5. Be responsible and accountable – It’s important to let your kids make financial mistakes rather than always coming to their rescue when the stakes are low.  The only way our children will learn to become fully responsible and independent adults is to be given the opportunity to fail and pick themselves up without our help.  

Teaching your children about money at any age will take time and won’t always be easy.  If you want your children to know how to successfully manage their money and be financially responsible adults, you must take the time now to give them the tools they need. Modeling good financial behaviors when your children are young and keeping the lines of communication open when it comes to dealing with money will help continue to guide them on their life-long financial journey.  

End of Year W4 Checkup

According to a recent survey, over 80% of Americans never updated their W-4 after the 2018 TJCA, which made sweeping changes to the tax rates.  Those that never changed their withholdings may now be in a position of currently owing the IRS additional amounts, plus possible interest and penalties.  

In order to ensure that you don’t get hit with any IRS penalties in the future, it’s important to revisit your W-4 withholdings annually.  The information you file on your W-4 determines how much money you’ll owe, or get back, when you’re filing your taxes. If you withhold too little, you may owe the IRS come tax time. However, if you withhold too much, you could end up with a large refund, which means you’ve essentially given an interest-free loan to the government.

Start by using the IRS withholding calculator to determine the right amount for you to withhold. If your situation is complicated, or if you’re confused, you may also want to consult with an accountant.  In addition, you should also revisit the W-4 if you’ve had a major life changing event, such as having a child, getting married or divorced, or if your spouse dies.  Next, review what your current withholding is. If the numbers don’t match up, you’ll want to adjust your W-4, which you can do at any point during the year.  

As you revisit your W-4, it’s also important to keep in mind that the 2020 projected tax rate schedules.

The key to paying the right amount of tax is to update your W-4 regularly. You should revisit your W-4 whenever you have a major personal life change. As we have written in the past, the potential for both a tax bill and a tax refund should be zero, or close to it. However, if you count on a big tax refund every year, pay attention to your withholding because it directly impacts your refund.  You can adjust your W-4 at any time throughout the year, but if you do it later in the year, there will be less impact on your taxes for that year.

If you need any assistance with your taxes or updating your W-4, you should speak to a professional.  We are happy to provide you with CPA recommendations if you would like. As always, please reach out to us with any questions or comments you might have.    

Are you ready for a recession? A survey says probably not

JPMorgan Chase Chief Executive Jamie Dimon warned Tuesday a recession may be on the horizon thanks to the continuing trade tensions with China.

“Of course there’s a recession ahead,” Dimon said during a morning call with reporters after the bank announced its third-quarter earnings. “What we don’t know is if it’s going to happen soon.  As you can see in the chart below, we are currently in the longest period of economic expansion in the history of the US. 

However, according to a recent survey by bankrate.com 2 out of 5 Americans are not financially prepared for an economic downturn if it were to happen in the next 6 to 12 months.  This lack of readiness comes at a time when the American economy is full of uncertainty. The Fed has cut rates twice this year to cushion the economy and experts are betting that there might be another cut as well when the Fed meets again in 2 weeks.

 

So, what can you do to make sure you are prepared for a recession if it were to happen?

 

First, you should pay off high-interest debts and boost your emergency savings. An emergency fund is key if an economic downturn leaves you strapped for cash or a potential loss of income.  Americans should also cut down on overall spending. You might want to consider having funds automatically put into a savings account from each paycheck.  

 

As to be expected, those with higher incomes feel more secure about their financial position if a recession were to occur.  Those that are more comfortable financially have the ability to look ahead and tend to be more goal-oriented. Typically, those that can pay their bills without much concern also have the ability to be more mindful of their spending and can build their savings funds to better prepare in the event of a job loss or other emergency.

 

For those living paycheck-to-paycheck, it is much more difficult to prepare for a downturn.  At a minimum, limiting any “wants” and putting aside even an extra $1 a day can be helpful is starting to build that emergency fund.  

 

Having a strong financial mindset is the most important factor in trying to save for an economic downfall.  You should limit what you spend and control what you save. Being proactive about your money, instead of reactive, will put you in a better position to prepare for downside risk. 

 

I can’t tell you when the next recession will happen with any accuracy. Neither can the TV pundits or even the best economists. But we know that it will happen again. Real businesses will fail. Start with a plan based on your individual situation, prioritizing the following things:

  • Building up emergency savings and paying off expensive debt
  • Maximizing your professional value and prospects
  • Allocating your portfolio based on your goals and not on how the market is doing right now

Your priorities and the plan you make will be unique to you. But once you put it into action, it should help you minimize the harm from a recession, bounce back quickly, and even grow your wealth. The simple act of putting a plan into action — giving yourself something to do — will improve your prospects of coming out of the next recession unscathed.

5 Money Issues to Avoid

According to a recent survey, money is one of the most common reasons for both sleep loss and divorce. Financial stress not only leads to anxiety for many, but is also one of the key factors that can lead to conflicts in a relationship. Finding alignment on money matters should be a top priority in any serious relationship (and may help you sleep better at night as well!), but many struggle with finding ways to have these important conversations. Here are five money-related issues that anyone in a long-term relationship should avoid:

1. Financial Infidelity – Dishonesty about money issues is a very common problem and is a key factor in ending a relationship. Whether lying about purchases or hiding massive credit card debt, holding back on financial information is lead to massive trust issues in any relationship. Partners should find a way to talk openly about their financial situation before it leads to problems in the future.

2. Being too controlling or judgmental – Feeling like your significant other is stopping you from buying things you want can often lead to serious problems in a relationship. It is helpful to decide on an amount of money that each partner can spend with no questions asked and don’t judge the things your partner might want to purchase. Make this amount something that works within the budget of your relationship so it doesn’t lead to further issues down the line.

3. Not talking about your finances regularly – Talking money might often lead to arguments, but it’s imperative not to avoid these conversations. These discussions should be about budgeting, setting joint financial goals and finding ways to agree on what to spend and save.

4. Refusing to Compromise – Both partners in a relationship need to realize they might not always get their way when it comes to money. You should continue to discuss financial matters until you can come to an agreement on something that works for BOTH.

5. Failing to Set Joint Financial Goals – It is extremely important for couples to set financial goals that they both agree on. If you are both in agreement on what your needs/wants are, then there is less likely to be an issue when it comes to deciding what to spend money on.

The keys to successful relationships regarding financial issues are transparency, setting clear goals and compromise. Keeping the conversations flowing regarding money matters is integral to a healthy relationship. As relationships continue to change and evolve, it’s important to continue to have these discussions in an ongoing fashion. Keep experimenting with different methods until you find one that works best for you and your significant other and remember to always try to keep an open mind. These discussions might just be the key to a better night’s sleep AND a more successful and happier relationship.

CFP Delays Enforcement of Their New Fiduciary Standards

https://www.youtube.com/watch?v=iYNTKWSX2oM&feature=youtu.be

The Certified Financial Planner Board of Standards Inc. (CFP) states that their new fiduciary standards will be delayed, pushing the enforcement of these important ethics back to June 30, 2020. With this news comes questions about the quality of service people can expect from those handling their money, and what this all means to them in the long run.

The CFP started reviewing their standards almost four years ago, in an effort to identify areas for improvement. Their code of ethics and standards of conduct, which were approved last year, require that all CFPs and brokers act in the best interests of their clients when providing financial advice. This is in contrast to the established set of standards that only required client advocacy with regards to their financial planning. With the current rule, if a CFP is not providing elements of financial planning, then they do not need to place their clients’ interests ahead of their own. It can come as a shock to many that those tasked with handling their money are not necessarily obligated to act in the best interest of investing it.

When you start to appreciate the significance of these standards or lack thereof, you can see why the CFP’s decision to delay enforcement has many concerned. Currently, the CFP has 85,000 financial advisors certified under their current standards. When you factor in that many planners with a CFP designation have multiple clients with varying amounts of money under their management, you can start to see the magnitude of all this.

To be a fiduciary means to act in the best interest of your clients. To uphold the integrity of such a title means that there cannot be any motivation of profiteering off clients in the interest of personal gain. A fiduciary is always to provide advice which is in the best interest of their clients.

The world of finance can be a tricky landscape to negotiate. We use money every day, and it touches upon every aspect of our life, direct or indirect.

That in mind, it’s important to consider regulations that may seem distant to us at face-value, but do in fact have a genuine impact on our wellbeing. Consider all this when you assess who handles your money. Huge firms that employ many advisors with the CFP designation were in fact the ones pushing for the delayment of the new fiduciary standards, stating that many of them needed more time to make the necessary business adjustments. The fact that they must alter their business strategies in order to incorporate stricter fiduciary standards proves that they have not consistently been acting in their clients best interest all along. An independent financial planner has the advantage of weighing all the options available to their clients, without being mandated to sell internal financial products. It’s characteristics like this that uphold the definition of a fiduciary, and help maintain the integrity associated with the term. Always be sure to take the time to consider these important characteristics, so that your financial wellbeing has as much integrity as those who are handling it.