This was originally published on Monday, April 17, 2017, in the Pacific Daily News. Click here to subscribe to the PDN.
Whether you make a lot of money or a little, finances are an issue in most households. Many families don’t communicate about finances, leaving one person in charge. Discussions are a key to making families financially sound. Regular discussions on budgets and goal settings can make a huge difference.
Here are a few money obstacles households face.
- Conflicting financial values. One of the main causes of divorce in America is money. Usually it’s not about how much they make but how the money is spent. Couples need to be on the same page and have the same money goals. Compromise and discussion is a must on a daily basis.
Create a budget and stick to it. Both individuals must agree and be aware of what the other person is spending. If you don’t communicate, you may overspend and not have enough money to spend on what is important. Keep a realistic attitude and hold each other accountable, in a friendly way.
If you have children, share with them what your financial status and goals are.
- Health care costs. With the current uncertainty of what health care insurance will and won’t cover, one thing for sure is health care costs continue to rise. Health insurance is a necessity, especially for families with children. There’s a huge financial risk associated with going insurance-free that could jeopardize your family’s financial well being. Be sure to read exactly what your health insurance covers.
- Lack of income. The cost of living continues to rise and unfortunately household incomes tend not to follow that trend. Some of the largest expenses households face are medical care, food, and housing — all of which have significantly outpaced income growth.
Most of the time a household’s debt increases because they use credit to cover necessities. Find ways to cut expenses and increase income. It’s not uncommon to have one or even both parents taking on a second job.
Not all jobs have to take you away from your family. If you have a skill that people are seeking, such as baking, repairing cars or gardening, take advantage of it and start a small business. A part-time job may not be ideal, but it may be exactly what you need.
- Retirement plan. A survey done by the Federal Reserve states 31 percent of non-retired respondents reported no retirement savings or pension — that includes 19 percent of people ages 55 to 64. Social Security isn’t a guaranteed source of income, nor is it enough to cover your retirement expenses.
As you get older, you will require more medical care. Without your own nest egg to assist with those medical bills, you may have to consider working much longer than you would like.
- Life insurance. Having life insurance will help ease the stress of losing a loved one. There are some affordable and very flexible life and supplemental insurance plans available.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.