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Single Steps Strategies Blog

A Mother’s Day Story

Although my mother passed away over 17 years ago, I still think about her every day. And with Mother’s Day approaching I think about all the special things she used to do. She was Irish and a great story teller.  She found a lesson to be learned in everything I would do.
 
I had not yet turned five when I started Kindergarten at Boggs Avenue Elementary School in Mt. Washington. Kindergarten in those days was more about socialization and constructive play than educational courses. So every day we sang and played and did art projects. I really liked to play; I liked to sing; but my talents waned when it came to art projects. 
 
One day the teacher gave us a mound of clay and she asked us to mold it into an animal.  I tried and tried and nothing seemed to happen. My clay continued to look like a lump to me.  Then suddenly the teacher came over, picked it up, turned to the class and said, “Look! Isn’t this wonderful.  Mary Grace made a cow.” Really? A cow?  Didn’t look much like a cow to me.  A cow was certainly not my plan. But young as I was I knew not to contradict my elders, especially when it was all good…and when it was all about me. So I painted it and let it dry, and in a few days I took it home.
 
I gave it to my mother, and I related the story of how the cow came to be. With a smile on her face she said to me, “That’s life. Sometimes successes come by accident. The important thing is to just be; show up and keep trying. And you will find that sometimes you are in the right place, at the right time, doing the right thing.”  My mother was so wise.
 
I look at my life sometimes and realize that a lot of it, a lot of the success, came from me just showing up, just being, just trying.  And I ended up in the right place at the right time.   
 
So I wish you a Happy Mother’s Day.  A day to celebrate all the times we have just shown up; delighting in being in the right place at the right time. Delighting in being the women that we are.  To celebrate a day to be grateful for our moms who taught us to do just that.
 
 

Mom and Dad, Just say “No!”

My mother had an expression, “When God turns a Mom on, He never turns her off.” I believe sometimes she used that to explain her reason for why she thought it was appropriate for her to interfere in my life and tell me what to do, even after I was grown, married and had a child of my own.  But it was also a reminder that she would always be there to help in anyway she could, if needed.  I believe most parents have that innate desire even when their kids are adults.

Sometimes that help to the adult child comes in the form of babysitting for grandchildren, or even pets; as house work, party planning, home repairs, food shopping, cooking, or even health care.  But many times, it comes in the form of straight out cash.

The Bank of Mom and Dad

When this happens, the money is often used for home improvements, tuition, down payments on a house, car payments, vacations, financing a business venture, paying legal fees for a divorce, or even helping the child get out of debt.  In more serious situations, it is used for day to day living expenses for the adult child.

And when this occurs, I can’t imagine any child who is not appreciative and grateful.  But………

As the parents age, retire; as income sources change or aging brings on health risks or the need to change housing options, a number of questions need to be addressed before the parent continues to be the “bank.”

What Comes Next?

Does the child have the expectations that the parent will continue to be a source of funds?

Does the child truly understand the parents’ financial situation?  Do they have a false sense of what the parents have?  Do they understand the impact on the parents’ financial situation as they are  on a “fixed” income?

Can the child be financially independent without the help of the parent?

Have the parents made financial commitments to the child that they don’t really have the financial resources to fulfill? Could this cause the parent to go into debt? To reduce their standard of living? Or jeopardize the parent’s future financial independence?

Who will be responsible for the parents’ income needs if the parents run out of money, need Long Term Care, or help staying in their home?

It Starts with Communication

One of the roles of a parent is to protect the child from danger.  Giving a child unrealistic financial expectations; and thus, allowing you to create a potential serious financial situation for you and your child, can be downright dangerous.  Over the years in our practice we have seen parents sacrifice their security for the security of a child.  One of our best ways of making sure parent and child are on the same page is through our Family Meeting program.  We meet with parents and children and address all of these issues.  After these meetings, those parents who were able to share their excess funds with their children where happy that they were able to say “yes” and still live comfortably.  For those who were thinking of sharing money they could not really afford were able to explain to the children why they just had to say “no”.  If the transaction is good for all involved, just say “yes”.  If not…..well….just say “no”.

It’s all part of the job of that parent that God turned on.  Is there a time to turn them off?

Pre-nup? Never! We are in Love!

He loves me, I love him. I trust her, she trusts me. She can have her stuff, I will have mine. He doesn’t have much money, I don’t either.

Why would we ever need a pre-nup? 

The answer to this could be…you don’t. But then again, maybe you do? And even if you don’t need an actual pre-nuptial agreement, you should still have the “pre-nuptial talk.”

Two major causes of divorce are money issues and lack of communication. If you and your spouse can’t talk about money, what else will there be that you can’t talk about? Some professionals believe the way people handle money may be indicative of how they will handle other things in life like relationships, business decisions, and parenting. So even if a formal pre-nuptial agreement seems out of the question, you still need to have the “pre-nup talk.” After all, as the saying goes, “Money makes people funny.”

Wondering what you should talk about? Here are a few ideas to get you started:

Review Your Credit Scores

You each should set up a Credit Karma account to check your scores. If your future spouse has a score of less than 700, you need to know what caused it—late payments? too much debt?—and you need to devise a plan to fix it.  

Low credit scores can impact a lot of the things you do in the future. If you decide to buy a house, a low credit score can impact your ability to get a loan. If you are looking to buy a car, your interest rate could be higher than someone with a better score. And even employers may ask to see your credit history before they consider hiring or promoting you; many businesses don’t want employees they feel are irresponsible with money.

Discuss Your Health Insurance Plans/Other Employee Benefits

Even if you have your own plans, you need to know what your partner’s plan covers. What are the fees/deductibles? If you are planning on taking a leave from work to raise a family, what kind of maternity/paternity benefits will you have? What kind of insurance is available for a family? What if you choose to adopt—are there benefits or family leave time?

You also need to consider what will happen if one of you loses a job or gets disabled. Where will your income come from in that scenario? Can one of you be completely responsible for all of the bills and debt?

Share Your Last Two Years of Tax Returns

It is important to see if there are any significant losses. If so, what were they and why did they happen? Is there any chance of an IRS lien? Do you think too much money was withheld…or not enough? (And are you happy with either arrangement?)

Remember, once you file a joint return you are seen as one entity in the eyes of the IRS. If issues arise in the future, what is your plan for approaching and fixing them? 

Previously Divorced? Share a Copy of Your Divorce Decree

If either partner has been divorced, the spouse-to-be needs to know the financial arrangements of that divorce. Is there alimony, child support, or other future financial obligations? If children are involved, is there life insurance for their care? Does the ex-spouse have any rights to pension benefits? Who is the beneficiary of benefits or investments? How should your own assets be designated? What kind of planning do you need to do for a blended family?

Arrange Your Bank Accounts

It’s important to decide if you will keep separate or joint bank accounts…or have both. If you have an inheritance, be careful about moving it into a joint account. It’s important to know how and when to keep pre-marriage assets in your own name. 

These questions are a good start to your “pre-nup talk,” but don’t stop the conversation there. Keep talking about finances. There are very few things in your marital life that will not be affected by money. Your financial situation relates to where you live, how you vacation, where the kids go to school, when you retire, how you help your community or favorite charities, and so much more. 

Having the “pre-nup talk” is essential. And even if you decide to live together instead of marry, are already living together, or were married without ever having the talk—the “pre-nup” discussion is important for you, too. It’s never too soon to get comfortable talking about finances with your partner.

He loves me, I love him. She trusts me, I trust her. These are the very reasons you need to have the “pre-nup talk.”