Financial well-being and relationships: What’s in and what’s out for 2024
The new year is a wonderful time to reassess paths and embrace new beginnings. It’s also a time to consider what outdated behaviors we don’t want to carry into 2024.
As a seasoned family law attorney, I’ve seen how financial actions can shape relationships. So here’s my take on what’s “in” and “out” for the new year.
What’s IN for 2024:
Getting smart about finances
Smart financial habits have always been “in.” But they tend to get sidelined, especially when set as a New Year’s resolution. So, make this year the year you decide to understand and actively manage your money. It’s a crucial step that not only has immediate benefits but helps provide long-term security. Getting smart about your finances means learning the basics of budgeting, investing and debt management. If you’re in a relationship, it also means discussing your financial goals with your partner to ensure that you’re both aligned and making important financial decisions together that may impact your future.
Organizing financial papers
Ensure that all important financial documents are kept in one place and easily accessible. This includes documents like:
- Bank statements
- Investment account statements
- Loan documents (mortgage, car, student loans, personal loans, etc.)
- Credit card statements
- Property records
- Tax returns
Having everything organized will simplify things when you need to review your financial health, make important decisions, or prepare for legal or tax-related matters.
Now is also the perfect time of year to check your asset and liabilities statement to make sure it reflects current values and liabilities. This personal balance sheet should list all your assets, including cash in bank accounts, investments, real estate and personal property, and liabilities such as mortgages, car loans and credit card debts.
Financial transparency with your spouse/partner
Openly sharing financial information with your significant other, whether you’re in a married or committed relationship, is key to ensuring that both partners are equally informed and building trust. This involves discussing each other’s assets, debts and overall financial status. Having this openness now can help avoid surprises later. That way, if unforeseen circumstances arise, you won’t be caught off guard, like discovering your savings are much less than expected or debt you weren’t aware of.
Reviewing (and updating) your prenup or postnup
Most couples don’t realize that prenuptial and postnuptial agreements should be updated when circumstances in the marriage or life change. For example:
- Having kids
- Facing illness
- Stepping back from work to be a caregiver
Such changes can make existing agreements outdated or irrelevant, so keeping them current is crucial to ensure they still serve your intended purpose.
This is why open communication is so important. In my practice, I’ve seen how sticking to outdated terms can strain or damage a marriage or relationship. Regularly revisiting and discussing these agreements can prevent such distress and ensure they continue to align with both partners’ evolving needs and circumstances.
Updating estate planning documents
Your estate planning documents should reflect your current circumstances. Here are some key moments when an update is necessary:
- Having children
- Separating from or divorcing a spouse
Life events like these can significantly alter your estate planning needs. Keeping these documents up to date ensures that your assets are handled as you wish, particularly during challenging times. This aspect is often overlooked and forgotten amidst the stress of an adverse life event. However, staying proactive with your estate planning can provide peace of mind and clarity for you and your loved ones during times of change.
Ensuring insurance policies are up to date
As your life evolves, so do your insurance needs. That’s why it’s essential to regularly review and update all insurance policies — health, life and long-term care — so you’re adequately protected. This means thoroughly reviewing your policies at least every few years.
Talking about your financial goals and concerns
Whether you’re married or not, discussing financial goals and concerns is fundamental in any relationship. These conversations not only help align your financial plans but also strengthen your relationship by fostering mutual understanding and support.
Addressing unhealthy financial behavior
Financial behavior is a common source of conflict in relationships. Maybe your spouse spends too much, or you have a partner who’s overly “stingy.” Starting the year by discussing these issues can prevent future disagreements and build a healthier, more rewarding relationship.
Getting clarity on what’s important to you
Understanding what truly matters to you helps guide your financial decisions, whether that’s paying down debt, increasing savings, or investing in ideas or companies that align with your values. Aligning your financial goals with your personal values can lead to a more satisfying and purpose-driven life.
What’s OUT for 2024:
Being ignorant about your finances
Staying uninformed is no longer an option in today’s world. Embrace learning about your financial situation and how to manage it.
Overspending (or spending and not saving for a rainy day)
Spending without saving can lead to financial instability. Prioritize creating a safety net for life’s unexpected expenses.
Avoiding financial conversations
Let go of the fear of discussing money matters with your partner. Open communication is key to resolving financial issues and reducing stress in your relationship.
Envying others’ financial status
Try to stop comparing your financial journey to others’ as it can detract you from focusing on your own financial growth. Instead, put your energy into setting personal goals and working diligently towards achieving them.
Ignoring your personal goals
Neglecting what truly matters to you in pursuit of other distractions can affect your long-term satisfaction. Focus on aligning your actions with your life goals and values to help live your fullest life.
Jonathan Dana is a family law attorney and founding partner of Tucker PLLC. For more information about navigating relationship dynamics, email jdana@tuckerfamilylaw.com or schedule a consultation here.
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