Planning for Two: Coordinating Finances With Your Spouse

July 24, 2019 by Comerica Bank


Financial planning can be a major hurdle for new couples. Choosing to partner in life is a big step: It requires a great deal of trust and openness. Clear conversations about key issues such as a target minimum balance for accounts or how to manage saving and spending are critical.

It can be easy to focus heavily on big-picture issues. How much debt is each partner carrying into the relationship? How do you want to share responsibility for individual debt now that you're a couple? What are your savings goals? Those are the kinds ofmajor issues you'll often find in advice articles for partners getting started in life together. Managing key day-to-day financial issues can fly under the radar.

Everyday financial considerations for new couples

Managing your finances as a couple may force you to reconsider best practices around managing your bank accounts. Whether you choose to open new shared accounts, to maintain individual accounts or to blend the two options, it can help to revisit core banking issues that can influence your decisions. Here are a few primary considerations to keep in mind:

Balancing account types

At any given time, you may want to maintain a balance of checking, savings and money market accounts.

Checking accounts are great for money that is going to move in and out of the account frequently. You can configure them for direct deposits and payments, making them a natural fit for regular expenses such as rent or predictable bills.

Savings accounts let you set aside cash so it can earn interest. You can access money in a savings account, but there are often specific account policies that make it beneficial to only use funds from savings when you really need it. The account is not designed for frequent withdrawals.

Money market accounts blend checking and savings. They deliver interest comparable to and sometimes exceeding savings and you can also write a limited number of checks per month.

Mixing and matching these account types based on what you and your partner need can give you the right blend of flexibility and stability with your everyday banking resources.

Addressing hard-and-fast rules

If you are taking the step to share income, you may want to also create a few rules on how you will both use your money. For example, many couples will work to discuss any spending before making a purchase, but also set a baseline for what they consider a small enough amount to allow spending without having a conversation.

Identifying goals for a minimum account balance can also be helpful. You may want to do this to avoid overdrafting your checking account or to ensure you always maintain enough funds in your savings and/or money market account to ensure you are getting sufficient value from interest.

It is also worth talking about any bank policies — such as maintaining a certain minimum account balance for accounts, how the firm handles automatic payments and what happens when you overdraft — so both of you know what to expect.

Setting a foundation for financial partnership

This is not an exhaustive list of the kind of banking issues new couples should keep in mind. But as you consider these primary matters, you can start laying the groundwork for financial transparency with your partner. Getting on the same page and setting clear expectations can position you to avoid relationship stress due to financial uncertainty later down the line.

If you are looking for some help to navigate these issues, reach out to Comerica Bank today. We would be happy to talk with you and your partner about strategies we have helped couples enact to manage their day-to-day banking needs in today's fast-paced digital world. We also offer online banking tools to help you and your partner manage your finances together.

 

This information is provided for general awareness purposes only and is not intended to be reliedupon as legal or compliance advice.

 This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

 

      

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Considerations to Make When Figuring out How to Pay for Daycare

July 22, 2019 by Comerica Bank

The matter of how to pay for daycare can leave many parents and guardians with sleepless nights. The high costs of child care are exacerbated by the educational and social development offered by daycare services. The result is often escalating costs and a need to build family schedules around the way a daycare functions.

These barriers can create a great deal of stress. But as families consider how to pay for daycare, they do have a few options at their disposal, including methods to defray the costs of care or manage their finances in a way that eases the burden of dealing with expenses.

Limiting the costs of daycare

There are a few ways to reduce how much your family is spending on child care, even without going with a lower-cost alternative. Finding the right care provider is challenging enough. Trying to switch just to save a bit of money is not always simple. However, you can work with your employer to see what options you may have available. In particular, many businesses today are more open to offering flexible work schedules, especially for those responsible for taking care of family members. Making arrangements to work at alternate hours some days can reduce the amount of time your child spends in daycare, cutting your costs.

If you do not need all-day coverage, you can also consider nanny share programs in which multiple households work together to pay a full-time nanny, with the child care provider splitting time between the participants.

Another child care assistance option comes in the form of a flexible spending account. Some employers offer flexible spending accounts as a means for employees to pay for key expenses either with pre-tax income or at a reduced tax rate. Many banks also offer savings programs designed to help families pay for education-related expenses.

Additionally, there are numerous child care assistance programs from state and federal government agencies. The specific provisions around these initiatives can be highly variable, but the government has created a centralized resource you can use to explore opportunities and find out what may work for your family.

Simplifying financial management to handle expenses

The saying, "Time is money," may be a cliché, but it is used repeatedly for a reason. Your time is valuable and, when it comes to managing the cost of child care, time you spend balancing the budget and handling payments could otherwise be spent with your child. Modern banking solutions are providing increased access to digital services, letting you automate payments and manage your account from a wide range of devices and locations. Even if you are only saving a half an hour a week that would be spent writing checks, mailing bills, and otherwise arranging finances with your daycare provider, that time adds up quickly over the years.

Mobile and online banking solutions can also provide instant visibility into account balances, making it easier to budget by reducing the need to manually track expenses.

When you are considering how you will handle the costs of daycare, it is important to think about more than just the monetary factor. The costs in terms of time and management can also add up in a hurry, and today's digital banking tools can help you along the way.

Comerica Bank can help you in this process. We offer robust mobile and online banking tools to help you manage your account and access key services at your convenience. We can give you the easy access to banking resources you need.

 

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.
 

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3 Life Changing Events to Prepare for Financially

December 6, 2018 by Comerica Bank

Nobody wants to think about a tragedy such as a natural disaster, car accident, illness or death, but those who plan in advance can alleviate the damage to themselves and their loved ones. However, you don't want to plan for just a disaster. Plenty of positive life changes also create financial challenges. Either way, it is important to make financial plans that give you the flexibility to respond.

Achieving financial peace of mind begins with an emergency fund.

Setting up an emergency fund

Conventional wisdom suggests that an emergency fund should contain enough savings to replace between three and six months of income or living costs. This can prove a key safety net for many minor emergencies and sets a foundation for further savings.

An emergency fund is usually best set aside in a high-interest savings account separate from your other funds. This makes it easier to avoid dipping into it casually for alternative purposes while allowing some interest to accrue over time.

Setting up an emergency fund is just the first step to being prepared for a life-changing event. Retirement accounts, funds devoted to saving for education and strategic estate planning are also important parts of strategizing prior to an emergency.

Ultimately, a life-changing event can be just about anything, but the most financially disruptive ones are those that have both an immediate and long-term impact on you or your household's fiscal well-being. With that in mind, here are three major life events and some tips on how to prepare for them:

1. Adding to the household

Whether you are getting married, expecting a child or planning for adoption, expanding your household brings unique financial challenges and opportunities that must be considered.

In the case of marriage, you must consider how you and your partner will merge finances, manage shared accounts and plan for your future together. Preparing to add a child to your family means thinking about new costs and saving for education. In either case, you may also need to think about insurance needs that may emerge to protect any dependents from a loss of income.


Strategic wealth management is critical in all of these cases, as it lays the groundwork for preparation. An effective wealth management partner can help you:

  • Identify the best account types to use relative to your financial priorities and future goals.

  • Help you evaluate cost expectations and your current ability to withstand those expenses.

  • Provide insights into trusts, specialty accounts, and estate planning opportunities to help you manage them effectively.

2. Illness and death

If your household has a primary earner, how will you maintain your lifestyle if that person becomes seriously ill or dies? What can you afford to invest in protecting against such an event, such as through insurance or savings, to safeguard the future? Do you have the resources needed to avoid financial hardship - health care costs, family support systems, etc. - if a member of your household becomes seriously ill?

All of these questions need to be considered with care, and they aren't ever easy to answer. Wealth management services can help you understand the full implications of such events. For example, if you own a business and a health issue forces you to step down from your position, a wealth management team can help you identify the best options to move forward while protecting yourself and your loved ones from financial difficulties. 

3. Employment changes

Whether you are laid off, decide to leave your job or are planning for retirement, it is important to have a financial plan to weather the period in which your income declines (or disappears altogether). An emergency account is a good first step here, but it is a limited solution.

Retirement planning is also becoming extremely complex. CNBC® reported that many consumers underestimate how long they are likely to live after retirement, leaving them in a situation in which they outlive their savings.

When planning for a change in employment, it's important to assess your entire financial portfolio, including any stock interests that may be associated with the company you worked for, and to understand regulations surrounding those funds.

Be ready for change

Wealth management services can help you evaluate the implications of change, gain a deep understanding of how life events impact your financial situation and advise you on next steps. At Comerica Bank, we take a thoughtful, personal approach to wealth management, building strong relationships with customers to help them achieve their goals. Contact us today to learn more.

 

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice. 

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

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