June was Effective Communications Month. And it’s a good idea to recognize the importance of good communication because it plays a role in almost every aspect of living – including your finances. You’ll want to clearly communicate your financial goals to your loved ones – and you’ll want to hear theirs, too.
Let’s look at some of the communica-tions you might have with family members:
• Your spouse – You and your spouse may have different thoughts about a range of financial topics – how much to save, how much to spend, the level of debt with which you’re comfortable and so on. Try to reach some type of consensus on these issues. However, in regard to investing, you don’t necessarily have to act in unison all the time. You each may have different investment styles – one of you may be more aggressive, willing to take on more risk in exchange for potentially higher returns, while the other would rather invest with an eye toward mitigating risk, even it means accepting a lower return. Of course, there’s nothing stopping each of you from pur-suing your individual investment strategies in your own accounts – IRA, 401(k) and so on. Still, if you are going to work toward common goals – especially toward a shared vision of your retirement lifestyle – you each may want to compromise in your investment choices. And this accommo-dation is even more necessary in your joint accounts.
• Your parents – If you may someday be involved with your parents’ financial plans – which is highly likely – you should know in advance what to expect. This may not be the easiest conversation to have, but it’s an important one. So, for example, ask your parents if they have a durable power of attorney, which allows them to designate someone to manage their financial affairs if they become physi-cally or mentally incapacitated. You might also inquire if they have protected them-selves against the potentially enormous costs of long-term care, such as an extended nursing home stay. If not, you might suggest that they contact a financial ad-visor, who can offer solutions. Once you begin communicating about these issues, you may well want to go further into your parents’ estate plans to determine what other arrangements, if any, they have made. If it seems that their plans are not fully developed, you may want to encourage them to contact an attorney specializing in estate planning.
• Your grown children – Just as you talk to your parents about their estate plans, you’ll want to discuss the same topic with your own grown children. Let them know who you have named as a durable power of attorney, what’s in your last will and testament and whether you’ve established a living trust. If you’re already working with a financial advisor and an estate planning professional, make sure your children know how to contact these indivi-duals. Of course, you don’t have to confine your communications to estate plans – if you want to help your children financially, such as loaning them money for a down payment on a home, let them know. By talking with your loved ones about key financial matters, everyone benefits. So, keep those lines of communication open.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, Member SIPC
Financial planning is not an easy task and can be overwhelming. Nick Suire with Edward Jones is here to help! Nick has been with Edward Jones his entire life as he is following his fathers foot-steps. He absolutely loves helping local families plan for the future and become secure in life. Consultations are FREE and worth every minute of your time. Reach out to Nick by clicking here.
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