Cutter Family Finances: Five Financial Lessons To My Kids . . . From Dad

Jeffrey CutterRichard Maclone Photography - Jeffrey Cutter

I live in Falmouth Heights, which is a great place for walking. Last weekend, on Father’s Day, when I went for a walk, I saw a young bride and groom taking their wedding pictures down on the beach, against the backdrop of the beautiful sunset gently setting over Nobska Lighthouse. I stopped my walk, sat on the bench next to the Casino and watched the proud father next to his beautiful daughter and thought . . . there I am in a few years. As most of you know, I have three girls, 13 and under.

I thought about that young couple. I thought about my daughters. I thought about how the youth have so many financial hurdles stacked against them, college debt, deflating wages, shrinking jobs, and a quality of living that is decreasing for the first time in a century. Because fighting about finances is one of the leading causes of divorce, I thought about what I would tell that young couple. I thought about what I will tell my daughters to start a marriage off on the right financial foot. The following are five building blocks for new couples that I believe lead to a happy financial future.

1. Create a Partnership: Most often, couples have very different incomes. It’s easy to think the “breadwinner” has veto power. But, it’s important not to make that presumption. Right from the start, both people should share equally in the decision-making. I cannot tell you how many times couples have come to see me to shore up their financial situation and I find that one spouse handles the finances and the other is in the dark. This is a scary place for a relationship to be. So, from the start, both partners need to take an active role in the finances. One thing Jill and I do is have a Money Matters Meeting at least once per month. We often go out for dinner or a drink, or at least for a walk, to talk about finances in general . . . and kids are not invited. We talk about where our money is going and the financial responsibilities that we each have.

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2. Live Within Your Means: This has never been more important than it is today. Creating a budget is more important today than it has been in two generations. Without one, it is easy to lose track of spending and fall into debt. With deflating wages young couples must learn how to stretch a buck. It starts with a budget and the discipline to stick to it. Jill and I budget a set an amount each month to spend at restaurants. So, if you see us out someplace and I am having a martini, I have plenty left in my monthly budget. If you see me with a Sheaffer beer . . . well, I may be close to my monthly limit.

3. Agree on Goals: A sound budget spurs a goal-setting discussion. This is so important and cannot be overlooked. You should address both long-term goals, like saving for retirement, and short-term goals, like saving for vacation. I often see significant challenges when one spouse is a spender and the other is a saver, but if both spouses agree on their goals, the spender is more likely to save.

4. Have Fun Funds: While I do recommend couples pool the majority of their money, I think it is a good idea for each spouse to have a fun fund. This way, both partners will feel a sense of financial independence, which can alleviate many disagreements. Neither spouse should need to “ask permission” to spend small amounts of money. I know that the last thing I want is to have to ask my wife permission to get cash so I can go have a beer with the guys on a Friday afternoon.

5. Ensure Equal Access: Make sure both spouses have access to all online accounts. Neither person should ever feel locked out of the financial process, or in the dark. This is one of the easiest ways to maintain financial balance in your relationship. Plus, if there is an emergency, it is important that either person is able to pay bills, access funds and understand the budget. In fact, we consider this to be so important, that in my practice we recently implemented software that centralizes all financial accounts and passwords, and all estate planning documents like wills and trusts. This allows clients to keep a full financial inventory of their household. For those who do not use such a software, it is imperative to put together a financial inventory worksheet. You can download a great one from our website at cutterfinancialgroup.com to help you get organized.

The bridal party finished their pictures and left. I found myself just sitting there looking at the beautiful horizon and thinking . . .

I thought about how lucky I am to be a father. I also thought about how the youth may have hurdles and challenges, but they also have the opportunity to start off a marriage on the right foot. But they must take action and have commitment.

I walked home and started talking to my girls about my five building blocks . . . they looked at me like I had three heads.

Hmmm . . . I guess I will need to keep working on it with them.

Be vigilant and stay alert, because you deserve more.

Jeffrey Cutter, CPA, PFS is the managing partner from Cutter Financial Group, LLC (www.cutterfinancialgroup.com), which provides private wealth and investment management through low risk, low volatility successful strategies. He can be reached at jeff@cutterfinancialgroup.com.

Investment advice is offered by Horter Investment Management, LLC, a Registered Investment Adviser. Insurance and annuity products are sold separately through Cutter Financial Group, LLC. Securities transactions for Horter Investment Management clients are placed through Pershing Advisor Solutions, Trust Company of America, Jefferson National Monument Advisor, Fidelity, Security Benefit Life, FC Stone, and Wells Fargo Bank, N.A.

This column sponsored by:

Cutter Financial Group, LLC, a family owned and operated company, was founded by retirement and investment specialists. We engage high quality, independent wealth managers who specialize in significantly reducing risk during times of volatility, while capturing a large majority of the gains of the upside. This strategy allows our clients to secure a better, and worry-free, retirement.

Learn for about Cutter Financial Group on their website www.cutterfinancialgroup.com

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