Tag: Budget

Money Tips for Newlyweds

July 30, 2019
Budgeting, Financial Planning, Guidance, Uncategorized

In a recent study, 35% of married couples described money issues as their primary source of stress. While there are many potential causes of such financial stress, in some cases the root may begin with habits formed early in the marriage.[i]

Fortunately, couples may be able to head off many of the problems money can cause in a marriage.

10 Tips for Newly Married Couples

Communication. Couples should consider talking about their financial goals, memories, and habits because each person may come into the marriage with fundamental differences in experiences and outlook that may drive their behaviors.

Set Goals. Setting goals establishes a common objective that both become committed to pursuing.

Create a Budget. A budget is an exercise for developing a spending and savings plan that is designed to reflect mutually agreed upon priorities.

Set the Foundation for Your Financial House. Identify assets and debts. Look to begin reducing debts while building your emergency fund.

Work Together. By sharing the financial decision-making, both spouses are vested in all choices, reducing the friction that can come from a single decision-maker.

Set a Minimum Threshold for Big Expenses. While possessing a level of individual spending latitude is reasonable, large expenditures should only be made with both spouses’ consent. Agree to what purchase amount should require a mutual decision.

Set Up Regular Meetings. Set aside a predetermined time every two weeks or once a month to discuss finances. Talk about your budgeting, upcoming expenses, and any changes in circumstances.

Update and Revise. As a newly married couple, you may need to update the beneficiaries on your accounts, reevaluate your insurance coverage, and revise (or create) your will.

Love, Trust, and Honesty. Approach contentious subjects with care and understanding, be honest about money decisions you know your spouse might be upset with and trust your spouse to be responsible about handling finances.

Consider Speaking with a Financial Advisor. A financial advisor may offer insights to help you work through the critical financial decisions that all married couples face. To speak with a Financial Advisor at CapSouth, call 800.929.1001, so visit our website at www.capsouthwm.com

Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information. This material has been prepared for planning purposes only and is not intended as specific tax or legal advice. Tax and legal laws are often complex and frequently change. Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third-party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third-party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third-party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://www.cnbc.com/2018/07/10/five-money-mistakes-that-can-destroy-a-marriage.html

Which is Better: Renting or Owning?

December 5, 2018
Budgeting, Financial Planning, Life, Wisdom

You’re moving. You’ve found greener pastures, and are looking forward—a little excitedly, a little nervously—to your new surroundings. You’ll be asking a lot of questions during this time. One of the biggest is, where will you live? To be a little more specific, should you rent or buy?

Here are some questions to ask yourself as you’re weighing your options:[i]

Can you afford to buy a house right now? How much money do you have saved?
How long do you plan on staying in the area?
Are you looking to settle down or do you want the flexibility to travel or move frequently?
Are you handy? Are you inclined or willing to do home repairs or renovations?
What are your goals involving your career and your family?

What are the advantages of renting? What are the benefits of owning? Let’s explore both sides.

Here are reasons why renting is good:[ii]

As a renter, you may have fewer maintenance costs and repair bills. If something that is part of the rental property breaks, it may be the landlord’s responsibility to fix it.
You may have access to amenities, such as swimming pools or fitness centers, that may cost homeowners bundles.
The taxman doesn’t cometh. You won’t get a property tax bill.
A tough housing market may spell bad news for homeowners, but renters are mostly immune to shifts in the real estate market.
You can jump ship relatively quickly as a renter and move elsewhere. You’re responsible for selling your home if you want to downsize or move. If you’re not committed to living in one spot for at least three years, renting may be your best choice.[iii]
If you fall into dire financial straits, you’re not saddled with a hefty mortgage.
As a renter, you don’t have homeowner’s insurance, you have renter’s insurance that is usually relatively inexpensive.
Apartment renters usually have lower utility costs.

Here are reasons why owning a home is good:[iv]

Owning a home is generally a good investment. If you own your home for many years, it may increase in value.
You’re able to create equity. Equity is the difference between what you owe and your home value. With each payment, you build equity. With your house, you can borrow against your home’s equity to meet other financial needs.
You may be able to reduce the amount of income taxes you may owe. Federal rules may allow you to deduct mortgage interest. Tax law has changed so you should consult with a professional tax preparer to learn more.[v] You may be able to deduct more during the early years of your mortgage with higher portions of your monthly payment going to interest.
Making consistent, on-time mortgage payments builds your credit history and may bolster your credit score. Lenders view you as a responsible borrower with a lower-default risk.
You have the freedom to decorate or renovate your home as you envision. You can paint your walls whatever color you want. You can knock down walls, redo floors, lay new carpeting, and design your home to fit your tastes or personality—without seeking permission from a landlord.

As you weigh your options, you can use rent-versus-buy calculators to determine your best financial options. The calculators request you plug in specific information: zip code, target monthly rent, target home price, and available home price. The calculator then shows you which is less expensive, buying or renting. Go to https://www.trulia.com/rent_vs_buy/ for a sample calculator.

Bankrate asks you a series of questions to help you determine your best choice financially. These questions include:

How much of a down payment are you able to make?
How much debt do you have?
What percentage of a home’s value would you be willing or able to make as a down payment?
What is your credit history?
How long do you plan to stay in your new home?
What are the average home prices in the area you’re considering?
Do you plan to itemize your mortgage interest?
What is the state of your budget?

To learn more, go to https://www.bankrate.com/calculators/mortgages/rent-or-buy-home.aspx.

We can guide you in making the tough financial decisions. Working with an independent financial professional can help you build a strategy for the pursuit of your future goals.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://www.bankrate.com/mortgage/renting-vs-buying-a-home/

[ii] https://www.investopedia.com/financial-edge/1112/reasons-renting-is-better-than-buying.aspx

[iii] http://time.com/money/collection-post/2792045/rent-or-buy-my-home/

[iv] https://www.discover.com/home-loans/articles/advantages-of-homeownership

[v] https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law

Teaching Teenagers About Financial Responsibility

November 6, 2018
Budgeting, Guidance, Investing, Life, Wisdom

Financial responsibility may not top the list of unmentionables for conversations with your teenagers, but it certainly may be one of the most important.

Today’s marketplace provides a wealth of alluring financial “opportunities,” many of which may lead the adolescent mind down unsavory paths with catastrophic consequences. Easy credit. The latest (and most expensive) in fashion. The finest and swiftest in high-tech gadgetry. And, of course, the inevitable lure of the automobile.

Good advice, taken to heart, may help steer your teenagers away from the youthful transgressions that have plagued countless generations past.

Before your teenager (or young adult) takes to the open road, here are four financial life lessons that may help keep them on the straight and narrow:

Credit and debit cards: Handled incorrectly or irresponsibly, these plastic cards can lead your children or grandchildren into some hot water. One in four students leaving college has more than $5,000 in debt.[i] One in 10 have more than $10,000 in debt. College students are hot property for eager credit card companies. Teach your teenagers how to use both credit and debit cards and hold them responsible for how they’re used.
Following a budget: It’s never too late to teach children about developing and adhering to budgets. Budgets help foster financial discipline and provide an important lesson on the value of money. Start by having your teenagers write down their expected income, expenses, and savings.[ii] Make sure they follow their budgets. Focusing on creating a personal budget early in life will create a very beneficial lifelong habit.
Establishing a savings account: Saving money can provide a few surprising and delightful benefits. Stashing away just $5 a week may sound boring, but once your teenager gets in the habit of saving, the easier it gets. Saving money helps develop discipline and reinforces the value of money.[iii] Encourage your teenagers to save early and often.
Automatically save every month. Modern banking technology makes saving money even easier. Teenage life may be filled with distractions, sending earnest adolescents off into financial traps. But understanding and utilizing sound financial tools may help alleviate some of the heartache. Automated savings—through bill pay or regular money transfers to bank savings accounts—can make it feel like another weekly or monthly expense.[iv] Saving money can become an ingrained habit.

If you would like to discuss your current financial needs or learn more about speaking to your teenagers about money management, we’re happy to talk. Call CapSouth at 800.929.1001.

[i] https://www.thebalance.com/credit-card-companies-love-college-students-960090

[ii] https://pocketsense.com/importance-saving-budgeting-teens-3077.html

[iii] https://www.investopedia.com/articles/personal-finance/031215/why-saving-money-important.asp

[iv] https://www.discover.com/online-banking/banking-topics/automate-your-savings/

Tag: Budget

Money Tips for Newlyweds

Which is Better: Renting or Owning?

Teaching Teenagers About Financial Responsibility

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