Family finances for a fairytale romanceBy John F. Wasik (Reuters)
While I don’t think Kate and Will will need any of my humble yeoman’s advice, discussing money issues on a regular basis is a good relationship builder. Here are five ways to steer clear of fiscal disharmony:
Put it all out on the table. The kitchen or dining room table is a great place to discuss expenses, bills, income and goals. Make a point of setting aside some time every month. Surveys show that money problems are among the leading cause of divorce. Is one or both partner a debtaholic? Get help and get a “debt score” to see if you have a problem. Clean the table first, both physically and metaphorically.
A home is where the heart is. But it’s often a bad investment, except for maybe Windsor Castle and Buckingham Palace, which are not only taxpayer-maintained but indirectly income producing. Most of us commoners, though, have to fix our own roofs, heat/cool our manor homes and suffer through one of the worst housing recessions in history. Owning a home is an emotional experience, yet don’t forget to tally up what it will cost you over time in taxes, maintenance, insurance and financing. The math may not add up, even with tax breaks. Renting is no sin.
Teach your kids about money. You can do this in so many fun ways. Give them piggy banks. Have them save their birthday and special-event money from grandparents. Give them an allowance. Set up a savings account and have them watch the balance grow. Assign them chores and pay them. Help them save at least half of what they earn. Charming guides for little ones include “Money Mama and the Three Pigs” by Lori Mackey and “The Great Piggy Bank Adventure“. Since kids get most of their ideas on money from their parents, start them off saving and realizing the fruits of their young labor.
Choose college prudently. Although I think the future heirs of England may just sneak into the Oxbridge system, for the rest of us, keeping our children out of debt after college is essential for a lower-stress adulthood. Spending the greatest amount of money on the biggest name-brand school isn’t always a wise choice. Community colleges are still the best bargain in higher education and save an average $3,000 a year (or more) over public universities. They offer virtually the same first- and second-year courses close to home. Before they even get into middle school, set up a 529 college saving plan for them. You can withdraw the money tax-free for education. Utilize the internet to find the best programs and available scholarships. Find the best cities for their higher education through the College Destinations Index.
Keep talking and saving. Life is an ocean that’s ever changing. There will be turbulent times of stress and illness. And old age is no parade with white horses. While the British mostly seem content now to take care of our fairytale couple well into their old age, the rest of us need to think about out-of-pocket medical expenses and long-term care. That ultimately means more savings. Do it automatically by auto-debiting money from your checking account into your money-market fund. Keep an emergency kitty. Consider long-term care insurance.
Most importantly, don’t forget to laugh after you put your money goals on auto-pilot. Most of us will never be dukes and duchesses of Cambridge or barons of Carrickfergus or be members of a moldy, unnecessary and taxpayer-funded monarchy. Still, we can live our lives productively in our own little palaces.
The key is ensuring that our castles and everything in them can be paid for without sacrificing our happiness. Oh, and Willie, don’t leave your royal hosiery lying about. Even a baron’s stinky socks can be an annoyance. In relationships, as in money, everything adds up over time.