Valentine’s Day is typically a time to express our love for our significant others with flowers, chocolates, nice dinners, romantic getaways, and other gifts. However, it can be just as important to express your feelings in ways that can make a significant difference in the lives of your loved one down the road, even if they aren’t as romantic. Here are some financial things you can do for that special person in your life:
1) Incorporate your partner in your financial planning.
Too often, one member of a couple tends to handle all the financial planning. While this can be efficient for the more technical aspects, both people in a relationship should at least be involved in setting goals and priorities. You may want to work longer, but she may want to retire earlier and move to another part of the country. You may want to be conservative with your household accounts, but he may want to be more aggressive. While there’s no one right or wrong answer to these conflicts, they should be handled between you and your partner openly and honestly so that you can plan for your future together.
2) Involve them in the day-to-day money management too.
Likewise, it can be just as important for your partner to be involved in the daily money management. After all, it’s tough to budget when you only control half of the family finances. If you’re scrimping and sacrificing while you feel like your partner is splurging, it can also lead to resentment and tensions in the relationship. To avoid this, consider having a weekly meeting with your spouse to discuss the family finances.
If you prefer to be more independent, you can simply give yourselves monthly or weekly allowances to spend any way you like. However, the allowances would be limited to agreed-upon amounts and when the money is gone, it’s gone until the next allowance period. (On the flip side, you can reward your frugality by letting yourself carry over excess amounts to be spent later on big purchases and luxuries.) You can further discourage spending by giving the allowances in physical cash since people tend to spend less with paper than with plastic.
3) Make sure your loved one is taken care of in case something happens to you.
Having adequate life and disability insurance is especially important if your partner depends on you for financial support. Long-term care insurance can also help by taking some of the care taking burden off their back and in some states, it can protect your joint assets from having to be spent down in order to qualify for Medicaid.
Don’t forget to make sure your estate planning documents like a will, durable power of attorney, advance health care directive, and living trust and beneficiary designations are up to date. There’s nothing like having your current spouse discover that your ex-spouse is still listed as the beneficiary on the individual retirement accounts and life insurance policies that you set up during your previous marriage. Jointly owned assets generally pass on to the joint owner without going through probate, but for assets without a joint owner or designated beneficiary, you may have to change the way the assets are held in order to avoid probate. Depending on your state, you may be able to set up payable-on-death designations on your bank accounts and transfer-on-death designations on your brokerage accounts, vehicle(s), and real estate as a way to make sure assets transfer outside of probate. You can also bypass the time and cost of probate by setting up a trust.
4) Keep your finances organized for your family.
You can involve your partner in all the financial decisions, have them learn all about personal finance, and do all the proper insurance and estate planning, but does your partner know where those estate planning documents are? How about the insurance policies? Do they know how to log into your bank and brokerage accounts? How about the names and contact information of your financial planner, tax accountant, and other advisers?
Consider using a tool if only so your partner will be able to see all the family finances in one place if something were to happen to you. (Just make sure they know the password.) You can also store such information offline if you prefer.
5) Help your significant other learn more about personal finance.
Beyond making sure they’re taken care of financially if something were to happen to you, you may want to help them understand and learn more about personal finances so they can manage on their own. They may find they even enjoy it. Some popular books that simplify personal finances for newbies include The Total Money Makeover by Dave Ramsey, Personal Finance for Dummies by Eric Tyson, and What Your Financial Advisor Isn’t Telling You by our CEO, Liz Davidson. Just keep in mind that a particular style that appeals to you may not appeal to them and vice versa so don’t be surprised when your favorite personal finance guru doesn’t resonate with your partner or they follow the guidance of someone you can’t stand (assuming that someone is promoting legitimate financial principles and not a charlatan).
Financial planning may not be the first thing that comes to mind when we think of Valentine’s Day. (In fact, I hope it’s not.) However, it’s as good a time as any to make sure your loved one is taken care of financially as well as emotionally.
This article was written by Erik Carter from Forbes and was legally licensed by AdvisorStream through the NewsCred publisher network.