Business and Financial Needs

Archive for the ‘Financial Problems’ Category

Financial problems in marriage such as uncertainty, unemployment, and financial hardship will hurt your marriage if the two of you are not talking with one another or if either of you prefer hiding your head in the sand.
Practical Tips for Weathering the Storm and Handling Rough Financial Waters Due to Unemployment
When short term unemployment turns into long term unemployment and unemployment benefits run out, feelings of panic, depression, guilt, blame, fear, and helplessness may set in. The worse thing you can do is to blame your unemployed spouse or yourself for the situation.

Recognize your marriage is probably stressed. Learn ways to cope with the stress that work for the two of you.

Stephanie Coontz: “A critical point is whether couples can remember and express the things they admire about each other. People under stress often cease to notice and acknowledge the helpful things their partners or children do, responding only to the irritating ones. This undermines the “economy of gratitude” that sustains mutual trust and obligations in a healthy family, creating the psychological equivalent of a credit crunch.”

You need to talk. Don’t hide your heads in the sand. Even though it may be difficult, talk about your financial situation. Focus on what you can do about your financial problems and then try to do it.

Make a list of all of your regular monthly expenses–housing costs, food, utilities, debt repayments, transportation costs, insurance and all of your other “must-pay” bills. You can use the Build-a-Budget Worksheet to make this step easier. Then, total your monthly expenses, and multiply the resulting figure by the number of month’s that you chose in step 1. For example, if you need to cover $2,500 in monthly expenses for three months, you’ll need to set aside $7,500 in your emergency fund.

Open an account.
Once you’ve determined how much you need to save, it’s time to decide where you’ll keep your money. Since you want your emergency fund to remain fairly accessible, a savings account, money market account or short-term certificates of deposit make good sense. Any one of these accounts will give you the liquidity that you need, while still earning you some interest.

Determine how much you can afford to save.
If you’re like most people, it’s going to take time to build up your emergency fund–probably even a lot of time. That’s okay. The important thing is that you get started today. Look over your finances, and determine how much you can afford to put towards your emergency fund each month. Even $10 a month will help, so don’t worry if that’s all you can afford to do.

Set up automatic deposits.
Make saving easy by scheduling automatic deposits to your emergency fund. Then, sit back and watch as the balance grows month-after-month.

Find ways to boost your savings efforts.
Turn a creative eye on your finances, and you’re bound to find ways to reach your savings goal faster.

If you feel it’s not worthwhile to talk with a professional liability risk advisor for early assistance in dealing with a problem situation, consider this statistic: On average, every CPA will have at least one claim made against him or her at some point in his or her career.

Also consider what may turn out to be an enormous expenditure of your time dealing with a malpractice lawsuit: interrogatories, depositions, document production, and time spent attending and testifying at trial. By not calling for advice in dealing with an emerging claim situation, you risk hundreds of billable hours and the stress of litigation, which could last for several years and harm your reputation.

Calling a risk advisor early will increase your odds of:

* avoiding a claim,

* controlling the situation,

* keeping a lid on damages or

* prevailing when litigation strikes.

Some insurance companies feel so strongly about the advantages of early reporting, that they provide substantial benefits to policyholders for reporting pre-claims matters. For instance, CAMICO will reduce deductibles by 50 percent, up to $50,000, for claims that are reported early. CAMICO will not charge attorney fees to policyholders in pre-claim situations if an attorney is needed, and a claim surcharge will not be imposed because a matter was reported before it becomes a claim or even because of claim reporting.

• Don’t let your pride or ego stop you from getting the assistance you and your family need to get back on your feet. Call 211 for information about available services in your area. You may be eligible for help in getting food, child care, medical care, paying your utilities, and more. If unemployment has put you living paycheck to paycheck and you are behind in your bills, learn your legal rights concerning your debts, then talk with your creditors about your financial problems.

• Be honest. Share your concerns and expectations with each other about your financial problems and the financial decisions the two of you have made. Share what you are willing to do and what you won’t do. Some decisions you may face due to unemployment include relocating, downsizing to a smaller residence, taking jobs you wouldn’t have considered a year ago, and going back to school to change your career. Don’t turn your discussions about financial problems into a win-lose situation.
• Trying to prove your spouse wrong is the wrong way to go,” says psychologist Jonathan Rich, author of The Couple’s Guide to Love and Money. Aim instead to create a plan that works for both of you.”

Couples often don’t talk enough about deeply held values, feelings about sacrifice, the primacy of the relationship over work, parenting, etc. This is especially true about money: figuring out to budget and how much they need to be “happy.” A bad economy can force people to take up these difficult conversations. If couples are honest and compassionate with one another, if they learn to work it out as a team, they could emerge with a better relationship. “23 percent of survey respondents said they won’t do anything differently, even if the economy continues to weaken. Hoping for the best isn’t a strategy; planning ahead is the best way to protect your family and build a strong financial future.”

• Be realistic. List your fixed expenses and your flexible expenses. Identify where you can’t cut back and where you can cut back such as cutting off cable or satellite television, looking for a less expensive telephone plan, deciding to not eat out, etc. Analyze what would be sensible changes in your budget and what wouldn’t make financial sense. For example, for some couples, switching to higher deductibles in automobile, house, and health insurance would be beneficial. For others, such a move could make the family finances worse in the long run. Consider getting retraining assistance, grow a vegetable garden or see if you can get a garden plot in a community garden, be open to working odd jobs or taking a temporary position, think about starting your own small business.
• Control your spending. Don’t rely on credit cards unless it is an emergency or for health care. If you have savings, try not to dip into your savings unless you both consider the expense absolutely necessary.
• Our relationship dynamics and resentments get played out with money,” says Jenn Berman, PhD, a marriage and family therapist. “It’s not uncommon to see a person get mad at his or her spouse, and then go out and buy something as revenge.”

It doesn’t make any difference if you have money or if you don’t have money. If the two of you have different spending habits, different savings goals, different thoughts about investing, or different fears about being poor, then financial problems will eventually surface in your marriage.

It’s quite possible that the one making the most money may try to control all the finances. Sometimes a power struggle concerning money will creep into your marriage.

“Like success, money is an emotionally volatile issue for most women. It’s probably the most complicated relationship we have—and the one that most controls our lives because we let it

How Many Checking Accounts?
Financial planners generally recommend that individuals in a marriage relationship who have disposable income should each have their own account. They can then save or spend money as they want without having to justify the expenditure or feel guilty about spending the money.

Importance of Talking About Finances in Your Marriage
Even though it is difficult sometimes to face into your feelings and thoughts about money, it is imperative that a married couple make time to discuss their finances and to make decisions together about budgets, short- and long-term goals, and investment strategies.