Money can be a point of contention for many couples. Between big expenses like taking vacations, buying a house, getting married or having children, relationships can be filled with tricky financial situations. Even trickier is if you and your partner have different views on financial matters—one of you is a spender and one is a saver. Here are some tips on navigating money management as a team.
Have Regular Check-Ins
The first step to managing your finances within a relationship is to talk about money on a regular basis. For some people, this may be easy. But money is a source of stress and anxiety for many people, so you might have to be a little more mindful about when and how you talk about it.
If talking about finances doesn’t come naturally to your relationship, try scheduling a time to talk on a regular basis. Once per month before most of your bills are due is a good interval to start with. If it’s a stressful conversation for one or both of you, try to set yourself up for success with your plans around the talk. Plan to have a fun date night immediately after your conversation as a reward. Or simply make sure you’re in a comfortable place when you talk to each other—be sure the room around you is clean and cozy, so you don’t add to your stress.
Agree on a Budget for Shared Expenses
If you’re at a point in your relationship where you’re ready to open a shared bank account, it’s important to agree on a budget for shared expenses. Especially if one of you tends to spend more money than the other, you should establish guidelines for you both to follow when using the shared bank account. You both have access to the account, so without guidelines, one partner may use the money sparingly while the other may spend the money liberally.
Think about the necessary living expenses you’ll use the shared account for like:
- Rent or mortgage payments
- Utilities
- Car payments, maintenance, and gas
- Internet and cable
- Groceries
- Phone bill
- Pet-related expenses
- House maintenance and supplies
- Toiletries
- Insurance
- Subscription services
Once you have a list of agreed-upon expenses, you can then develop a process for covering things that fall outside of those categories. For big purchases, it might mean having a discussion before deciding to buy something with money in the shared account. For smaller purchases, it might just be your partner giving you a heads up when they’re about to buy something. Regardless of how you choose to spend the money, guidelines and open communication are key to avoiding disagreements and tricky situations around your finances.
Keep Separate Accounts for Personal Expenses
If you do choose to open a shared bank account, it may be a good idea to keep separate accounts for your personal and incidental expenses. Especially if one of you tends to spend more money than the other, having control over separate accounts gives each of you the freedom to spend or save how much you’d like without worrying about what your partner thinks.
Having separate accounts can be beneficial for buying personal items, gifts for your partner or other things that you know your partner won’t use. For instance, you might want to save a little bit of money to spend on a gaming system, but your partner prefers to save money and invest it instead. With personal accounts, you can both manage a portion of your money however you’d like.
Use a Financial Professional as a Neutral Party
It’s a good idea to have a professional opinion when it comes to managing your money. For couples with different financial habits, it’s even more important to have a financial professional there as a neutral party. This person can help both of you manage your shared finances, figure out how to save and invest and plan for big life expenses together.
If you need help talking with your partner about money, you’re planning to open a joint bank account or you’re starting to think about a large expense, reach out to a financial professional for help.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.
Many older Americans rely on Medicare for their health care needs. But it’s not always easy to figure out what’s covered and how much it will cost. Medicare benefits change from year to year, and 2021 is bringing an increase in premiums for participants. The good news is, there are other ways to save on Medicare costs. Here’s what you need to know about this year’s changes in Medicare.
Changes to Part A
Medicare Part A generally covers hospital and nursing homestays. While most participants don’t pay a premium for this coverage, those who do will see an increase in their premiums. Here are the changes to be aware of:
- If you worked for 30 to 39 quarters during your life, your premium will increase $7 for a total of $259 per month
- If you worked fewer than 30 quarters during your life, your premium will increase $13 for a total of $471 per month
Deductibles for Medicare Part A will also increase this year. For each benefit period—60 days from your first day at the hospital or nursing home—the deductible will be $1,484, which is $76 more than in 2020. If your stay lasts longer than 60 days, you’ll be responsible for paying coinsurance—a percentage of your health care costs. For Medicare participants, this is a daily fee that will vary depending on whether you’re staying in a hospital or nursing home. You can find more information about specific coinsurance costs on the Medicare website.
Changes to Part B
If you have Medicare Part B, you’ll receive coverage for physician fees, outpatient services, medical equipment, as well as certain medications and home health services. Premiums are based on income, so everyone will pay a different amount for this coverage. Across the board, premiums rose in 2021 for Medicare Part B, but the increase is less than it was in 2020. Deductibles for Part B coverage also increased to $203 per year—$5 more than in 2020.
Changes to Parts C and D
Medicare Part C, also known as Medicare Advantage, is a combination of Parts A and B, while Medicare Part D covers prescription drugs. Both of these plans are optional and offered through private insurance companies, so plan costs vary by provider. Premium costs are adjusted based on your income. You can compare plans on the Medicare website.
Changes Due to COVID-19
The COVID-19 pandemic changed the way we think about health care in 2020. To meet the needs of Medicare participants, some changes were made to coverage last year that are still in place. Medicare coverage now includes:
- No-cost testing for COVID-19
- All medically-necessary hospitalizations related to COVID-19
- The COVID-19 vaccine (if you have coverage under Medicare Part D)
- An expansion of telehealth services
- Waiver of the 3-day hospital stay requirement to enter a nursing home
Access to health care and the costs associated with it are always changing. And with a new administration in office, we can expect more changes to Medicare coverage and costs. If you’re concerned about how Medicare coverage affects your finances or need more information on premium costs and coverages, talk to your financial professional.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.
The year 2020 was unprecedented for so many reasons—all because of the COVID-19 pandemic. Many suffered from job losses, had to juggle childcare while working from home, and tried to keep their small businesses open with few resources. Thankfully, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) established a business loan program to help keep businesses across the country afloat during tough economic times.
You may have already taken advantage of the first round of Paycheck Protection Program (PPP) loans, but the good news is that a new COVID-19 relief bill was signed at the end of 2020, meaning more access to funds for businesses under the PPP. Here’s what you should know about eligibility, applications and amounts of the second round of PPP loans.
Am I Eligible?
If you didn’t receive a PPP loan last year, you’re automatically eligible for one this year. If you did receive a PPP loan in 2020, your business must have suffered a loss of revenue last year in order to qualify for the second round.
For those who are applying for the first time in 2021, you’ll be eligible if:
- You were in business before Feb. 15, 2020
- Your business is still currently open
- You have fewer than 500 employees OR fewer than 500 employees per location
For those applying for the second time in 2021, you’ll be eligible if:
- You’ve used up your first PPP loan amount
- You were in business before Feb. 15, 2020
- Your business is still currently open
- You have fewer than 300 employees OR fewer than 300 employees per location
- You’ve had a reduction of 25% or more in gross revenue
How Do I Apply?
Applications for all PPP loans opened on Jan. 11, 2021, and are available until March 31, 2021. To apply, you’ll need to go directly through a lender. The U.S. Small Business Administration (SBA) has put together a tool to help you find a lender if you don’t already have one.
How Much Am I Eligible for?
The second round of PPP loans will be calculated based on your average monthly payroll costs—if eligible, you’ll have access to a loan equal to 2.5 times this average monthly cost. To calculate your average monthly payroll costs, you can use records from the year period before the loan application or the calendar year of 2020 or 2019.
There are a few exceptions to these guidelines. For instance, if you own a food or accommodation business (you have a NAICS code beginning with 72) and you’re applying for your second PPP loan, you’ll be eligible for 3.5 times your average monthly payroll cost. Depending on the type of business you own (including seasonal, sole proprietorships and independent contractors), your eligibility and loan amount may vary. Refer to the SBA website for more details.
What Are the Terms of the Second Round Loans?
The terms are the same as for the first round of PPP loans. At least 60% of the loan must be spent on payroll and the rest on other eligible expenses. Beyond payroll, rent and utility costs, the second relief bill has expanded eligible expenses to include:
- Operations expenditures, like software and other human resources needs
- Costs of property damage caused by public disturbances in 2020, not otherwise covered by insurance
- Supplier costs for purchase orders essential to operations and made prior to receiving a loan
- Worker protection expenditures, like personal protective equipment for staff or property improvements to maintain COVID-19 safety compliance
If you follow these guidelines, the loan will be fully forgiven. If you don’t follow the guidelines, the loan will have an interest rate of 1% and a term of five years. Your payments will be deferred—either for 10 months after the covered period ends or when you receive a verdict on your forgiveness status.
PPP loans have been a saving grace for some small businesses. Whether you’re thinking about applying for your first or second PPP loan, a financial professional can help you determine your eligibility, decipher loan terms and consider the impact of a loan on your business and personal finances.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.
