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By: Charlie Katz |
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As part of my series about the “How to Navigate and Succeed in the Modern World of Finance”, I had the pleasure of interviewing Jeff Motske.
Jeff Motske is an author of a financial compatibility guide, an accomplished executive, radio personality and host of The Jeff Motske Show, and financial advisor. More importantly, he is a believer in the power of everyday Americans and is committed to helping them reach financial independence. He began his career in retirement planning out of college, and as he watched the landscape of financial services, Jeff saw how disconnected most of his industry was from the real-life issues of Americans. In partnership with Kevin Mackintosh, he created Trilogy Financial in 1999 to bring together resources on financial, tax and estate planning for middle-class Americans. Jeff started Trilogy with the vision of improving the industry, a vision that is still guiding him today. In 2016, he spearheaded the creation of Trilogy Capital, an RIA asset management firm that provides investment solutions for everyday Americans. Jeff has dedicated his career to helping everyday Americans, business owners, savvy investors and new couples build the business and lives they dream.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I was a math major in college, and one of my professors suggested I get into the mutual fund or financial services business. At the time, it wasn’t a very common business. So I thought about it for a bit, and found a wanted ad for a financial advisor in the local newspaper. I took the job and was blessed enough to have a manager that trained and mentored me. This person really taught me to be an advisor to my clients, and I grew my career quite quickly. If it weren’t for that professor, I’m not sure I would have considered finance as a career.
When he retired, he recommended I be the manager of the office — and I was the youngest guy in the office! And I managed it really well. Once you have that kind of confidence, it helps take you out of your comfort zone.
That’s exactly what I did. And it helped me grow in my success with both clients and team members. I was happy and in a great place in my career. But one night when my wife and I were visiting with friends, my buddy’s wife — who was a woman of few words, but a deep listener — said to me “well, you know you’re going to leave that firm and start your own, don’t you?” She said it so confidently, and it meant a lot coming from her. At the time, my wife was pregnant and I thought there is no way this is a good time to take a risk like that. But she made such a bold impact on me, and so I did — I went and started Trilogy Financial in 1999 because I was in a good place financially. If it wasn’t for her, I don’t think I would have started my own company.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
There’s a lot of funny mistakes, but I think one of them stands out the most. When I left the old firm to start my own, I didn’t do it the “right” way. I didn’t have a business plan, I didn’t have office space, I didn’t have a team — nothing! I just dropped of my letter of resignation and that was that. Looking back, that probably was not the right way to do it, but it worked out somehow.
When I left, team members wanted to come with me! We had nothing — we worked out of my garage with cardboard furniture. It was late in the 1990s and when we had a new computer get delivered from Dell, people would calls dibs on the box to use it as a desk!
Integrity aside, I would have planned better. But it worked really well, and I’ve learned a lot from it and other mistakes.
It was funny, because when the pandemic hit, I needed privacy at my house to take calls (we have a lot of glass walls), and I found myself back in my garage with a make-shift desk and a water heater in the background — just like old times.
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
I’m a big reader. I’ve read so many books that have helped me in my career. I’m a big Patrick Lencioni fan, he writes on business and team management, and how to get teams to work better. I’ve read every book of his and love his disruptive style. His podcast The Table Group is great as well.
The book Learned Optimism by Dr. Martin Seligman is another great one. If you can get through the first third of it, I believe it’ll make you a better person, advisor, father and help you better speak for yourself. I’ve read it three or four times and I get something new from it every time.
Max De Pree wrote a great book called Leadership is An Art that looks at leadership as a kind of stewardship, stressing the importance of building relationships, initiating ideas, and creating a lasting value system within an organization. This book has also greatly helped me grow, lead and train teams.
All of these are a bit disruptive and unique, and I love that perspective because it really helps you step out onto a new platform of leadership.
Are you working on any exciting new projects now? How do you think that will help people?
We are! We are working on a state-of-the-art client experience service center. As a financial advisor, many people perceive our job is to advise people how to save and spend their money. But we believe it takes more that to make an impact.
The service center is called the Mack Service Center, named after my late partner and co-founder of Trilogy Financial Kevin ‘Mack’ Mackintosh — a meaningful client service team was one of his core focuses. He designed and developed the service team based on what he learned over the years as an Eagle Scout, rowing crew member and in business. From day one, he had a clear vision of what Trilogy could accomplish when we worked together and focused on service. In fact, he was an early and passionate adopter of our ONE TRILOGY culture — One Purpose. One Plan. One Experience.
This service team consists of a group of people with a unique culture that will be delivering great, helpful service to our clients. This is contrary to what’s “the norm” for financial advisory companies. Most have an advisor-led the service model, and there’s nothing wrong with that except that not all advisors have service as their strong suit.
We’re building what I call a “trust transfer” — we want the advisors spending more time advisor-ing while the service team does what they do best.
Mack took the ball and really got it rolling for this project. He found the right people to lead it and get it off the ground. He passed in early 2020, and the Monday before he did…he told me it was ready.
He instilled the right attitude, built the right culture. And I’m proud that his legacy lives on.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
When I started Trilogy Financial, my vision and purpose was to help financial advisors be better advisors. However, as time has gone on, that’s evolved into something bigger. Now my purpose is to help everyday Americans gain financial independence. They are the group of people that often struggle to achieve their financial goals, and we want to focus and help those that need sound advice.
This is the culture we’ve built today. Our advisors want to help as many people as they can, and my job is to make those advisors more productive so that can do more for their clients. I know they’re making a difference. I see it, and clients tell me all the time “if it wasn’t for my Trilogy financial advisor, I don’t know where I’d be.” That is purpose-driven business.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
I have so many, but the one that first comes to mind is that you have to wake up and challenge your comfort zone every day. Never challenge your values or morals, but always your comfort zone. If you do that, you’re going to continue to get better.
I’m a big fan of mentoring. I believe it’s important to know who is in your foxhole with you as you go through life. Who are the people you know will be there for you and you’ll be there to them? Know who they are, because they will help you succeed when you step out of your comfort zone.
As is relates to my business, I believe in One Trilogy, One Mission and One Vision. I wake up, think and talk that every day and it helps me challenge that comfort zone.
I also believe you have to trust your instincts. If they’re telling you something, you have to dig deeper to find out if its valid or not. That helps you be a better leader. And it is a muscle you have to flex. My instincts over time have grown and improved. It’s important to think through those instincts, because your words matter. You also can’t let your emotions get in the way of better decision making.
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
The best form of advertising is word of mouth. It’s your reputation! If you do good work, you’ll get introduced to high quality people and new clients. Your digital reputation is right behind that — potential clients are going to do their research and Google you, and you may or may not get a call based on that.
When you get a good referral, the foundation of trust is built in. And it’s all driven by integrity and good work you provide from there.
If a fellow business leader would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
Well…I bootstrapped it and I think that was the best decision because I didn’t have a boss with a different agenda. I have friends who went the VC route and they almost left because of that voice hanging above their head.
I recommend bootstrapping and raising the capital yourself, if you have that luxury. But if you have to go the VC route, choose wisely. This goes back to the beginning of my story. We bootstrapped everything. We had heart and grit and integrity to make it all happen. That’s why we succeeded.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
The traditional answer is try to maximize revenue and get your margins in line. But there’s always a story under the numbers, and I think we have a great story.
Right now, we’re focused on attracting advisors approaching retirement age with a financial planning book of businesses they need to sell and pass off their clients. Our firm is attractive to those entrepreneurs because we have the right people paired with the financial stability to take care of their clients when they retire.
Your company value includes those resources, your culture and story. We have built teams with advisors of all experience levels who support each other and the various generations of clients we have. That’s valuable.
Another huge component in your valuation in your team members’ tenure. We have long tenure within our entire team and those that are looking to sell us their business see the value because they know our team will be there for their clients for the long term.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
This was Trilogy Financial in 2015. The best piece of advice I can give is to think about what the future looks like, and how you’re going to pivot to reach that place. It’s the old Wayne Gretzky story — he wasn’t the fastest guy on the ice, but he always knew where the puck was going. And he could put himself in a position to succeed.
So how do you go about figuring out what the future looks like and how to benefit from it? It’ll take reflection, reading, some discussions with mentors or friends and more. But don’t do it in your office, or with anyone from your office. Go on vacation or put yourself in a situation that takes you away from your everyday so you can think clearly.
For example, I travel a lot for my kids’ sports. When I’m on that plane, I can put in my headphones and really go to that 35,000-foot space to think. Sometimes it’s on a beach chair on the sand — same thing.
In was 2015 on a beach reading a book that I realized I needed to pivot Trilogy from a broker-client relationship to a true fiduciary and advisor platform. I was clear we had to make that move in order to have experienced advisors making a big impact for a bigger amount of people. It was going to be hard, but we had to do it.
As a CEO, you’re constantly making decisions. And there are a handful of pivotal ones that you HAVE to get right. Think them through, talk to people who can give you advice — maybe a mentor from the past, but it’s most likely not someone inside your company because it could impact the company negatively.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
Early on, it’s easy to not have an organized budget and operating plan. But you NEED to do those things. You need to figure out your budget quickly, your costs and your cost controls. If you’re not thinking about your Return on Investment (ROI) on every dollar you spend, you might get to a point where you’ve gone too far. Don’t just spend money on something because you need it. You have to draw a line, see the line and know where you will get results if you cross that line. It’s easy to misunderstand your ROI or not be able to apply the concept to everything you buy, because they’re not very tangible benefits. That’s when you have to think through it to identify them so you don’t spend your way into trouble.
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
There’s a lot of things people need to succeed in the modern finance industry. It’s always changing!
- You have to have grit: Grit and perseverance are huge because it’s not an easy business. The barrier to entry is getting harder and harder. If you have grit, tenacity and can get out of your comfort zone, you can be successful. There are elements within the industry that are naturally not fun, but you have to do them in order to succeed.
- You have to be able to cater to the masses: It’s very important to hone your people skills and your communication skills. If you can figure out how to communicate with people individually, in a manner that best works for all different types of communication styles, the sky is the limit. And this goes for both speaking and writing!
- Be great at follow through and follow up: You have to say what you’re going to do, and then do it. At Trilogy, we get our clients’ questions answered, and we follow through on everything we said we were going to do. Sometimes it requires 2 of us in a meeting, so things don’t get missed, but that’s ok! There’s nothing worse than telling someone you’re going to do something and then don’t.
- Position yourself well: To excel in any business, you have to get good at promoting yourself in a way that makes your clients talk about you when you’re not around. That’s the fastest and healthiest way to build a financial firm. Make that positive impact on them, service them well and they will tell their story. You may even get longstanding professional friendships that give your business value through obtaining good referrals.
- Structure your week: Plan your week, your calls, meetings and the time you need to build plans, recommendations, etc. If you plan well, have good systems in place and are focused on doing good work for your clients, you can spend 90% of your time working on your clients and 10% of your warm referrals that are coming in the door — instead of spending a significant amount of chasing cold leads.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
The best tip I can recommend is to build that structured week. The beauty about a financial career is that you have flexibility to carve out what you need to do.
It’s important to keep ahold of your support system. They matter. For example, for the last 26 years my wife and I have had a date night every Wednesday. And we stuck to it — if I had a late meeting or engagement, I made it clear that I had to leave by 7pm. I also make sure I’m at my kids’ games or matches. And when we take our vacation over 4th of July weekend, we maintain a “no electronics week” to make sure we get the release we need. The ability to “shut off” is important. So plan your vacations and your breaks. If you’re working hard, you need a break. It’s the best way to be great for your clients.
Another suggestion is to not give your clients your personal cell number. You need to set boundaries, and be able to let go. A lot of good advisors get too many clients they’re trying to service, and it ends up being detrimental to everyone involved. You have to trust people on your team to help you out. You can only do some much and you have to let go and trust others — this is that concept of trust transfer again.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
My movement would be to have a well-regarded advisor in front of every everyday American. They’re the neglected population! I hear people who only want to go after high net worth individuals, but it’s those who are 52 years old with $400,000 in their retirement that need someone to get ahold of them. These are the people who need the support and the education to get to where they want and need to be.
The hard part is, that person who needs support the most often doesn’t think they have to money to sit down with advisors. These are everyday Americans and they deserve for someone to help them pursue their dreams.
This was very inspiring. Thank you so much for joining us!
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Jeff Motske is a Registered Representative with, and securities offered through LPL Financial, Member FINRA/SIPC. Investment advisory services offered through TC, A Registered Investment Advisor. TC markets advisory services under the name of Trilogy Financial (“TF”), an affiliated but separate legal entity. TC and TF are separate entities from LPL.
By: Tyler Gallagher |
As part of our series about what one should look for when hiring a financial planner or adviser, I had the pleasure of interviewing Jeff Motske, CFP®, president and CEO of Trilogy Financial, author of “The Couple’s Guide to Financial Compatibility” and host of “The Jeff Motske Show.” Jeff Motske, CFP®, is president and CEO of Trilogy Financial, a privately held financial planning firm headquartered in Huntington Beach, Calif. with 10 offices and more than 100 advisors nationwide. He is the author of “The Couple’s Guide to Financial Compatibility,” a book that equips couples with tools to keep their finances healthy and relationships strong, and host of “The Jeff Motske Show,” a podcast that also airs on LA’s AM 1150 where he guides listeners through proven steps toward financial freedom. Seeking a better version of the industry he had grown to love, Motske founded Trilogy in 1999 after observing that the “Wall Street-style” mentality of his peers conflicted with the “Main Street-style” needs of his clients. For the past 25 years, Motske has empowered everyday Americans to pursue the day that work becomes an option by providing easy-to-understand advice, educational tools and supportive guidance. He understands there is no one-size-fits-all approach to personal finance, and that people deserve advice that is tailored to their unique needs, lifestyle, personality and goals. Jeff Motske is a registered representative of and securities offered through LPL Financial, Member FINRA/SIPC.
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Thank you so much for doing this with us, Jeff! Our readers would love to ‘get to know you’ a bit more. Can you tell us a story about what brought you to this specific career path?
I was introduced to the financial industry by a college professor who noticed my aptitude for numbers. It was the people, the clients I met along the way who needed my help, that kept me in the industry. As a young man, I was empowered by the good I could do for my clients. There were retired widows who appreciated increases in their monthly incomes and young families just getting started on the road to financial independence. I truly value those relationships and am proud to see some of those young couples I worked with long ago reach their goal of financial independence and to work with their grown children who are just getting started on their own financial path.
Can you share a story about the most humorous mistake you made when you were first starting in the industry? Can you tell us what lesson or takeaway you learned from that?
Mistakes aren’t limited to when you start in the industry. I made one just a few short years ago that I often share. I had been working with a particular couple for twenty or so years when it was finally time for them to retire. Over the years we had discussed all sorts of aspects of their planned retirement, from the details of selling their business to the possibility of selling their home. When I met with them to finalize the details of officially turning off their wage-earner cards, I asked what they had planned to kick-off their retirement. The husband told me that he wanted to rent an RV and travel the country visiting all of the national parks. I laughed, believing this was a joke. He had never mentioned such plans in all the years I had been working with them, and based on the shocked look on his wife’s face, he hadn’t mentioned those plans to his wife either. A few days later, I received a call from the wife, telling me that I had to speak to her husband and talk him out of this idea. In the end, they chose to take one trip in an RV and headed out to Wyoming.
That trip seemed to satisfy both of them and became a great memory. For me, though, it was a reminder that you can never ask your clients enough questions. As the author of “The Couple’s Guide to Financial Compatibility,” I pride myself on asking in-depth questions to get couples on the same financial page. Clearly, though, it doesn’t hurt to dig a little deeper to ensure that you’re creating a detailed and thorough plan for your clients’ finances and life.
Are you working on any exciting new projects now? How do you think that will help people?
At Trilogy, we are constantly refining our teams of advisors. In an effort to ensure a complete and uninterrupted service model for our clients, our advisors work in groups. Multiple team members sit in on client meetings to ensure proper notes are recorded and to establish relationships with clients. This creates a smooth transition should a team member ever be unavailable due to illness, other commitments or even vacation. Our team members also have different areas of expertise to ensure that every client receives a comprehensive level of service.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Is there a takeaway or lesson that others can learn from that?
There definitely have been moments in my career that heralded momentary success. Over the years, though, I’ve realized that it’s best to look ahead. Our industry is constantly changing, and it doesn’t benefit anyone to sit back and rest on their laurels. Success comes to those who are constantly striving to be innovative and ahead of the curve.
What three pieces of advice would you give to your colleagues in the finance field to thrive and avoid burnout? Can you give a story or example?
First, I do believe that being part of a peer-to-peer study group is an invaluable resource, as is finding a quality mentor. Spending time with other successful people is a great way to stay motivated. These people also provide strong examples of how to improve in your field. Some of Trilogy’s great innovations have been derived from sharing and refining ideas with peers, both by chatting with them and by seeing how they operate.
Equally important is enjoying what you do, which is why we champion the team dynamic. I truly believe that being a financial advisor is a noble profession. However, that doesn’t mean you have to like every aspect of it. When the right teams are formed, you can focus on where your strengths lie while another team member can excel in an area in which you would gladly not spend much time. Not only does this play to everyone’s strengths, but it also facilitates a flexible schedule where advisors are able to pursue other activities with their family or in the community.
Lastly, I do believe that you need a healthy work-life balance. Yes, you do have to work hard to achieve success. At the same time, you also don’t want to miss the moments of watching your child’s soccer game or giving time to a charity that is important to you. My personal mission statement is, “Do something wonderful for someone every day,” and I don’t mean just at work. Success isn’t simply a reflection of what your title is or how much you have in the bank. Success is a reflection of the positive impact you made on the people you interact with in every aspect of your life.
Ok. Thank you for all of that. Let’s now move to the core focus of our interview. As a “finance insider”, you know much more about the finance industry than most consumers. If your loved one wanted to hire a financial advisor (not you :-)), which 5 things would you advise them to find out about before committing? Can you give an example or story for each?
1. Comfort: Make sure that you find someone you can talk intimately with about your finances. You want to feel comfortable sharing personal details with them and be able to ask questions about the advice they’re giving you. You need to feel that you’re in a true partnership with your trusted financial advisor.
2. Communication: You need to communicate a lot with your advisor. You should be sharing both your dreams, so they can plan appropriately, and your fears, so they can adequately address them.
3. Credentials: You want an advisor that is acting in a fiduciary capacity. This means the advisor is acting in the best interest of the client at all times.
4. Part of a team: It’s beneficial to avoid relying on a single financial planner. There may be moments that you need a timely response, and it’s valuable to know there is someone you can address when your primary advisor is busy meeting with other clients or out of the office. Also, while working with a solitary older advisor can provide experience, younger clients need to be aware that they run the risk of these advisors retiring before they reach their own destination of financial independence. The last thing a client wants is for their financial advisor to not be available when he or she is needed most.
5. Connections: An advisor with access to other experts in neighboring fields, such as taxes, estate planning and insurance risk, can seamlessly solidify your personal network. Not only are such referrals valuable when trying to select a particular professional, but they can also add a level of ease and security if your financial advisor has an ongoing professional relationship with them.
I think most people think that financial advisors are for very wealthy people. This is likely not actually true. Can you explain who would most benefit from hiring a financial advisor and why? Can you give an example?
Middle America definitely needs to work with a financial advisor more than wealthy people. A trusted financial advisor can help keep you on track and accountable to your goals. Without that help, many will fail to save or plan enough and ultimately have trouble securing what they’ve been working so hard to achieve. Additionally, the market can be an intimidating place for inexperienced investors. A trusted advisor can ensure that they make sound decisions when things get rocky, rather than allow their emotions to take the wheel. Having money can solve a lot of problems, but building wealth requires a lot of work, patience and tenacity.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I am part of a CEO study group, and I owe a lot to those group members. The open and honest feedback I have received over the years from my peers has been invaluable, and the relationships I have formed have been life-lasting.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
My personal mission statement is, “Do something wonderful for someone every day,” which illustrates my belief that each person has the power to make a positive impact. This extends well beyond finances. At Trilogy, we believe our purpose is to provide opportunities for people to live their best lives. Obviously, this can be seen in the steps that we take to help our clients reach financial independence. This also applies to how we empower and encourage our advisors to become leaders, both at Trilogy and in their community. We also encourage our team members across departments to aid and lift up their fellow associates. We are all interdependent, and we recognize that when we lift someone else up, we lift ourselves up as well.
Thank you so much for joining us. This was very inspirational.
Written by: Alayna Okerlund | Last Updated February 24th, 2020
Congratulations! You just completed one of life’s greatest milestones: marriage.
Whether you had an elegant reception or a lovely, intimate ceremony, you and your spouse are likely making plans for the life you two will build together. And that’s how it should be.
Unfortunately, some newlyweds lose this level of excitement and bliss early on because they fail to be on the same page when it comes to finances.
According to the 2017 Divorce and Debt Survey conducted by MagnifyMoney, 21 percent of U.S. adults who were polled said money was the main reason for their divorce.
Finances can be tricky to manage, and having another person in the mix can make it even more of a challenge. To help you and your new spouse, we asked a few experts for their top finance tips for newlyweds.
Focus on communication
“In general, be open about finances with your spouse. Money is one of the biggest causes of divorce in the United States. Specifically, lack of communication or total one-sidedness (i.e., one spouse being controlling) when it comes to finances can lead to marital stress. Each spouse is going to come to the table with different feelings and experiences with money, but that is not necessarily a bad thing. The important thing is to have frank, honest discussions about money and to make sure you are maintaining open airwaves of communication during the inevitable periods of disagreement.” — Taylor Jessee, Director of Financial Planning at Taylor Hoffman Wealth Management
“As newlyweds, it's more important than ever to get on the same page with your finances. Preferably you do this in your pre-marriage counseling through your church. Things to talk about include long-term goals, spending habits, monthly budget, retirement, investments, and more. The best thing you can do for your marriage is to have open communication and that is especially important when it comes to money. Talk about your finances early and often for a successful marriage.” — Kelan and Brittany Kline, The Savvy Couple
“You need to be talking about everything related to your finances: your goals, your debt, your dreams for retirement. You need to talk about the good stuff and the rough stuff. You need to talk — and a monthly financial date night with your partner can provide you with that opportunity.
If you need ideas on what to talk about, you can go through my financial compatibility quiz, which covers topics from spending, saving, childcare, mortgages, charitable giving, aging parents, and expectations for retirements. You’ll find topics to agree on, but you’ll undoubtedly find things you don’t agree on. When you discover these topics you don’t see eye-to-eye on, then you have to see how much both of you are willing to compromise on.
Perhaps your idea of retirement is traveling the country in an RV, but your partner wants to see the world in top-rated resorts. Or perhaps your parent is in failing health and you want them to move in with you, but your partner is willing to take a second job to afford for them to stay somewhere else. I’ve seen these situations, and because they were brought up early enough, the couples were able to discuss their views, their options and find a compromise that worked for everyone.” — Jeff Motske, CFP, President, and CEO of Trilogy Financial
“One major financial tip for newlyweds is to get comfortable talking about your financial health with your new spouse. In fact, not talking about money can hurt your relationship.
A Policygenius survey found 17.5 percent of couples who don't know each other’s credit score plan to leave their partner due to money issues, compared to 2.5 percent of couples who do. Just over half — 53 percent — of survey respondents said they had shared their credit score with their partner.
This friction comes in part from a lack of communication or transparency about financial wellness. For example, if one spouse has bad credit, it could impact the couple’s ability to get joint financing for major purchases, like a home.
It’s important to be open and honest about your money with your partner. Set aside a regular time to have a conversation with your significant other about your financial health. Go over short-term and long-term spending goals to ensure you’re both on the same page.” — Hanna Horvath, Personal Finance Reporter at Policygenius
“Finances can be a touchy subject. It may be that the love of your life has a completely different view about how to handle finances. This can be a big strain on a new relationship, and it is said to be the number one reason for divorce. So, do your relationship a favor and address this topic early. Many people think that marriage means joint everything. However, this is a personal choice and needs to be discussed.
You may decide on separate accounts but what cannot be separate is your financial plan and the discussion you have about it. You are partners, which means you need to share and the other person has a right to know. Business partners cannot hide things from one another and neither should marriage partners.” — Justin Lavelle, Chief Communications Officer for BeenVerified
Set goals together
“After you’ve tied the knot, take some time to discuss your current financial situation with your spouse.
You’ll likely have done this well before the ceremony, but there’s a good chance that the celebration and its accompanying events took a serious financial toll, too, so it’s best to factor that into the mix once things have actually settled down.
Explore your mutual financial goals, and see if they’ve changed since before your marriage. If they have, consider adjusting your budget accordingly. This may require you to reconfigure the way you approach a number of major financial factors, such as savings, debt, or investments.
If either of you is struggling with debt, try to come up with a joint approach to eliminate it and build both of your credit scores. The higher your scores, the more likely you are to be able to rent desirable properties and secure large loans with appealing rates, and these may be fundamental for your future if you’re aiming to buy a house or a new vehicle.” — Sean Messier, Credit Industry Analyst at Credit Card Insider
“Life goals translate directly to financial priorities. If one spouse wants to create a work environment that allows her to train for a marathon every year, and her husband feels strongly they be fully focused on working to build up savings before starting a family, there can be issues. Whether the goals are to take a vacation or fund a future child’s college education, discuss them and write them down.” — Sean Fox, Consumer Finance Expert and Co-President of Freedom Debt Relief
“When the officiant said ‘and now you are one’, you didn't stop having your own ideas, dreams, and goals. You have to intentionally decide what to do with your money and when you'll do it, and discuss the specifics. Just like in Kindergarten, when you share, you don't always get your way, so be prepared to compromise.” — Christian Barnes, Ramsey Preferred Financial Coach for Do Better Financial
Consider getting joint health insurance plans
“If both employed, take a close look at your company health insurance benefits. It may make sense for one spouse to switch over to the other’s health plan, or to continue keeping separate plans. The employer of one spouse might offer better/cheaper benefits than the others.
If you are both covered by High Deductible health plans, and you have access to a Health Savings Account, then the amount you can save into the Health Savings Account doubles.” — Taylor Jessee, Director of Financial Planning at Taylor Hoffman Wealth Management
Consider creating a joint budget and joint financial accounts
“Working with newlyweds and engaged couples, I have noticed that budgeting and spending plans are few and far between. Many couples are unaware of how much they are spending. I sympathize with them because society makes it very easy to spend using credit cards, shopping online, and very little use of checkbooks or cash.
The most important step that I think all newlyweds, engaged couples, or people in long-term partnerships should do is to figure out how much they are spending each month. Then, figure out how much is coming in each month. If you have funds leftover — great. Now you can figure out where to put those additional funds to help accomplish your goals. If you find that you have more month than money, a serious look at your expenditures will allow you to see where you can cut back.” — Tiffany Welka, Financial Advisor and Accredited Wealth Management Advisor at VFG Associates
“If you don’t want money to become a worn-out subject in your marriage, try sharing it. Sharing money, when done with a budget, will eliminate 99 percent of all money arguments instantly. Create a shared budget with your spouse, give it full control of the money, and you’re done. So if you want a new pair of jeans, don’t get into heated conversations with your spouse. You have a budget — you and your spouse have already agreed on the ideal way to spend your money. Instead, ask your budget if it’s ok to buy jeans. You’ll get an unbiased answer based on your finances. If it says you can afford jeans, buy them without hesitation. If your budget says you can't, listen to it. Let a budget be in charge of your spending, and you will eliminate the source of money arguments between you and your spouse.” — Evan Sutherland, Co-founder of Budgeting Couple
Budgets get a bad rap for being straight-jackets, but in reality, they are a plan for telling your money where to go and ensuring it doesn’t wander off without you even realizing it. Create a plan for each month before the money comes in so you’re both striving towards the same goals and not pulling in different directions. — Ben Watson, CPA and Personal Finance Expert for DollarSprout.com
“One of the best finance tips for newlyweds is to get on a budget as soon as possible. But it needs to be a joint budget, where both parties have input. You should get the budget set up with the basics, like fixed expenses, for cable TV, smartphone, and Internet, and then look at the subjective categories, especially entertainment and discretionary spending. For the latter category, consider setting a rule whereby any purchases that surpass a certain dollar amount, approval is needed from the other spouse.” — David Bakke, Personal Finance Expert at Money Crashers
“Switch all of your savings to a joint high-yield savings account. It's a good excuse when you get married to do some spring cleaning and make sure your money is in the best spot.” — Kevin, Manager of Just Start Investing
“The purpose of a joint bank account is for you both to have access to the same assets. Take on a ‘what’s mine is yours’ mentality. Just as it’s important to discuss your debts, make sure your partner knows what assets you have and be open to sharing. Communicate and check in with each other often to ensure you’re sticking to your budget and not overspending the assets you share.” — Erin Ellis, Accredited Financial Counselor at Philadelphia Federal Credit Union (PFCU)
Be smart about your marital income
“The best financial advice that we've ever gotten was from my father-in-law, and it's helped us maintain a debt-free lifestyle for the last 18 years.
The advice was this: If you ever plan on living on one income during your married life, always life just off of that income and save the other. Is one of you going to stay home and raise kids? If you are, then don't live a lifestyle that's based on needing both incomes to keep it up. If someone's going to take eight years off of work to raise kids until school age, it's difficult to keep up with house payments and expensive car payments when one whole income goes away.
We've lived by this rule our entire marriage, and we've had savings when we needed it and could pay cash for things like cars and vacations without incurring more debt.” — David Gafford, Co-founder and Director of Marketing of Shift Processing
“It's time to invest (if you don't already), and take advantage of as many tax-deferrals as possible, while also saving up for the next big life event.
This order is all about what types of accounts to invest money in, in the best order, to take advantage of as many tax-deferrals as possible. The best order to save for retirement is
• Contribute to your 401k up to the company match
• Max out your IRA to the annual contribution limit
Go back and max out your 401k to the annual contribution limit
• If you qualify for a Health Savings Account (HSA), contribute to the max and treat it like an IRA
• If you earn a side income, take advantage of a SEP IRA or Solo 401k
• Save any excess in a standard brokerage account
After you have your investments set up, you should also be saving for the next big life event.” — Robert Farrington, America’s Millennial Money Expert and the Creator of The College Finance Investor
“Start saving now, not tomorrow. Time is something you cannot get back, and the longer you save, the better. Research compound interest and see how much you could have. I understand that for most people, retirement seems like a million years away. I am now 56 and have no idea where the time went. If you start saving when you are young, your retirement can be full of choices.” — Jay Ferrans, President of JM Financial & Accounting Services
Create an emergency fund
“Whether it’s three or six months’ worth of daily living expenses is up to you, but start to put away some cash in an easily accessible account, in case of unemployment, major illness, or another unforeseen event. Those with less stable income, like freelance and contract workers, are urged to save more.” — Sara Skirboll, Shopping and Trends Expert for RetailMeNot
Consider getting life insurance
“Now that you have someone else depending on you, you need to arm yourself in the event something bad happens. Life insurance is often overlooked, despite how important it is. There are many different kinds from many different companies, but the main thing is to make sure you leave enough behind for your loved ones to pay for final expenses, replace your income for a certain number of years, put your kids (or future kids) through college, etc.
Your loved ones will already be overwhelmed and saddened as is when you do pass away, so this will help relieve a huge burden and create more peace of mind. Further, life insurance is cheaper and easier to acquire the younger and healthier you are.” — Chase Lawson, Author of Financial Freedom: Breaking the Chains to Independence and Creating Massive Wealth
“Even if one or both of you have life insurance through your employer, it's crucial to get a term life insurance policy on both spouses separate from an employer. When you change jobs or get laid off, your life insurance terminates immediately. Since rates for term life insurance are set according to your age and health status, you could end up paying more than a few years from now for the same policy. — Lingke Wang, Co-founder of Ethos
Meet with a finance professional
“I recommend talking to a financial planner around life events. The reason? The same financial plan should work during the same period of the life event. For example, if you create a financial plan as a newlywed, the same plan should work for you until you have children (if you don't have them already).” — Robert Farrington, America’s Millennial Money Expert and the Creator of The College Finance Investor
“Meet with a financial planner and possibly a mortgage broker if a home purchase is in the near future. Getting an outside perspective really helps to understand how to lay out your goals together. Meet with the financial planner even if you don’t meet with the mortgage broker.” — D. Shane Whitteker, Owner and Chief Mortgage Broker at Principle Home Mortgage
Keep your taxes in mind
“Make sure to adjust your W-4 elections to 0 and single to prevent taxes being owed from the ‘marriage penalty’ since you will be filing jointly for the first time. Many couples are shocked to see their taxes go up, so to avoid owing money, make this adjustment to your withholdings. — Jacqueline Devereux, Finance and Credit Expert with SproutCents
Be dedicated to credit
“A newly married couple may have recently exchanged wedding vows but have they exchanged their credit reports? Financial transparency is important to establish with your spouse and one of the ways of accomplishing this is for each person to request their credit report and review it together. Consider it as an opportunity for the couple to address any concerns and identify what they may need to work on in order to create financial stability and wellness in their marriage.”
“Frequently, couples think they will share credit reports and scores once they get married. The reality is that each spouse has his or her own credit reports and scores. These are based on accounts each person maintains in his or her name (even if they share the same last name). Each person needs to obtain his/her own credit reports, review for accuracy regularly, and correct errors on his/her own credit report.” — Sean Fox, Consumer Finance Expert and Co-president of Freedom Debt Relief
“Do not jump the gun to start fresh and cancel your credit cards. This may impact your credit score since it is established based on things such as length of time a card has been held by a user. Instead, look to add each other to your desired accounts. This also removes the need to explore alternative credit options, which can additionally impact your credit score.” — Jared Weitz CEO and Founder of United Capital Source Inc.
“Build your spouse's credit. If you haven't already had the money talk, do it now. If one or both of you has credit card debt, it's time to formulate a plan for paying that off together. You may also learn that you have better credit than your partner. If your spouse has a lower credit score than you, consider opening a credit card and making your partner an authorized user.
As you and your partner use the card responsibly — by paying your bill on time, every time and by using 30 percent or less of the credit available to you — you both will enjoy the benefits. Your strong score will only get stronger, and your spouse's score will improve over time as well. A higher credit score will matter when it comes time to buy that first house, as you'll be eligible for lower interest rates and more favorable terms.” — Michael Cetera, Finance Analyst at FitSmallBusiness.com
The bottom line
In the end, it’s up to you and your spouse to determine how to handle finances in your marriage. Ideally, you should aim to have financial conversations with your significant other even before
you get married. Knowing where they stand and what they believe in when it comes to finances early on can save you and your spouse a significant amount of stress, heartache, and time.
To sum it up, you and your new spouse should take the following steps:
• Focus on communication
• Set both financial and non-financial goals together
• Consider getting joint health insurance plans
• Consider creating a joint budget and joint financial accounts
• Be smart about your marital income
• Create an emergency fund
• Consider getting life insurance
• Meet with a finance professional
• Keep your taxes in mind
• Be dedicated to credit
Many grandparents are willing to help with college costs. One thing to keep in mind is that grandparent-owned 529s have a downside related to FAFSA, though there are workarounds.
There are several ways grandparents can help pay for a grandchild’s education without giving money directly to the student. Grandparents, parents, and students must understand each of the options before deciding which one may be appropriate for them.
For instance, they need to know whether the method they’re using jeopardizes a student’s prospects for need-based financial aid, or if it meshes well with the grandparents’ overall estate plan.
Here is a look at three ways grandparents can help fund a grandchild’s education, and the pros and cons of each:
1. Invest in a ‘529’ plan
Financial advisers often recommend the state-sponsored education-savings plans known as 529s to grandparents who want to help with college costs because of the many advantages this type of plan offers.
These plans, which invest mainly in mutual funds, offer tax-deferred growth on every dollar invested, and distributions are tax-free when used for qualified educational purposes. Grandparents can pick any state’s 529 plan, and some states even offer residents a tax deduction on contributions. These plans also are flexible in that any unused funds can be transferred to another grandchild or blood relative.
Grandparents can put as much as $15,000 a year ($30,000 if they are married) per grandchild in a 529 plan without triggering gift-tax consequences. Even better, they can “bunch” five years of annual $15,000 gifts into a 529 in one year without triggering a taxable event, a potentially attractive benefit for those seeking to reduce the size of their estates.
“To me, the 529 is the turnkey solution for college planning,” says Jeff Motske, certified financial planner and president of Trilogy Financial, a financial planning firm in Huntington Beach, Calif.
Grandparents have the option of owning the 529 themselves or contributing to a 529 plan owned by the parent for the benefit of the child. One advantage of owning the account is that you “can control where the money goes right up until the time it’s used,” says Jody D’Agostini, a certified financial planner with AXA Advisors’ Falcon Financial Group in Morristown, N.J. Grandparents can even use the funds for themselves, albeit with tax consequences, should a financial need arise, she says.
INVESTING IN FUNDS
There is, however, a downside to grandparent-owned 529 plans for families seeking need-based financial aid: Distributions count as student income on the Free Application for Federal
Student Aid, or FAFSA, and student income is weighted much more heavily than parental income in the aid formula.
There are some potential workarounds, however. One option is to switch ownership of the 529 to the parent around the time the grandchild expects to start college. Not every state’s 529 allows for a change in ownership, however, so this is something to explore before choosing a plan, Ms. D’Agostini says.
Another option is to wait until after Jan. 1 of the beneficiary’s sophomore year in college to take a distribution, says Mark Kantrowitz, publisher and vice president of research at Savingforcollege.com. Since the FAFSA now asks for income and tax information from two years back, there would be no FAFSA on which to report the distribution if the student plans to graduate in four years. (If the student expects to graduate in five years, the family should wait until Jan. 1 of his or her junior year to take a distribution, Mr. Kantrowitz says.)
The grandparent also could roll over up to a year’s worth of college expenses to a parent’s 529 plan after the FAFSA has been filed. Provided all of the funds are spent on qualified educational expenses, it won’t have to be reported on the next year’s FAFSA, Mr. Kantrowitz says.
Some grandparents may not want the responsibility of owning the account, preferring instead to contribute a certain amount each year to a 529 plan owned by the parent for the child’s benefit. This may be appealing to those who want to give small amounts of money each year—around $1,000 or less.
In this scenario, “your grandchild gets all the benefits without you having to worry about maintaining the account,” says Joseph Conroy, a certified financial planner and financial consultant with Synergy Financial Group, a wealth-management firm in Towson, Md.
The downside, of course, is the grandparent cedes control of the money to the parent.
2. Direct payment to an educational institution
Grandparents can write a tuition check for any amount directly to a qualifying college or graduate school without triggering gift-tax implications, says Eric Brotman, chief executive of BFG Financial Advisors, a financial planning and wealth-management firm in Timonium, Md.
Some grandparents like this option because they can pay the university directly and still give the grandchild an additional $15,000 tax-free.
Grandparents, however, can’t claim a charitable distribution for tuition they pay on a grandchild’s behalf. Also, this exemption to the IRS’s gift-tax rules applies only to tuition expenses and not to other college-related expenses such as books and supplies. Another consideration is that the money isn’t refundable if the student decides to switch schools, so it isn’t advisable for grandparents to prepay tuition for all four years. Also, grandparents should be aware that this type of payment could have an impact on the student’s eligibility for need-based financial aid.
3. Fixed-indexed universal-life insurance policy
Another, less-talked-about option for paying for college—albeit a controversial one—is using cash-value permanent life insurance.
One type that some advisers like is fixed-indexed universal-life insurance. Mike Windle, a partner, and financial adviser at C. Curtis Financial Group, a financial-planning firm in Plymouth, Mich., recommends this option because of the flexible premiums and upside potential without the downside risk.
To make this strategy work, the policy should be owned by the grandparent, with the grandchild as the insured, making the cost of insurance inexpensive, says Mr. Windle, who owns these types of policies and offers them to clients.
Having such a policy allows grandparents to contribute after-tax money in a lump sum—monthly, quarterly or annually. When the funds are used, they are considered a loan against the cash value of the policy. They are tax-free at distribution, and they don’t count as income or assets on the student’s FAFSA, Mr. Windle says.
He generally recommends fixed-indexed universal-life insurance policies to clients whose grandchildren are 8 years old or younger. The policies he recommends have no cost to the grandparent to withdraw funds (and withdrawals aren’t counted against the grandparent’s yearly gift-tax limit) if the loans from the policy occur in the 10th year of the policy or later, Mr. Windle says. If grandparents take a withdrawal before the 10th anniversary, it could cost them about 2% of the loan, depending on the insurance company, he says.
Though premium rates aren’t guaranteed, Mr. Windle says the additional cost for a child would be minimal and is likely to be offset in part by growth in the policy’s cash value.
Another benefit is that the money can be used for multiple purposes—it isn’t limited to education. And the policies have a death benefit if something happens to the child.
There are downsides to using life insurance as a vehicle for college savings, however, and not everyone thinks it is a good idea. An insurance policy can be pricier and the investment selections more limited than with some other options grandparents have for funding college, financial experts say.
Before purchasing a life insurance policy for college-savings purposes, grandparents should consider the type of insurance and return on investment, as well as applicable costs, to ensure it’s the best option for their situation.
