Yes, some say it’s a "Hallmark Holiday", but then some spouses think otherwise, right? Well, if you blew it, I’ve heard that it’s NEVER too late. Make this week count, my friend.

Now last week’s "festivities" aren’t the only experience I have with the language of love. You see, we meet with married couples almost every week in the course of preparing taxes and handling other such matters. It’s part of what we do–and, as we do so, we get sort of a crash course in marital communication.

Before you get worried–know that we don’t pass judgment on anybody’s marriage! Everyone has their own, unique relational dynamic. And every marriage works a little bit differently–it’s part of what makes it a wonderful institution.

All that said, however, I’ve noticed that *finances* can be a major sticking point in a good marriage.

But the great news is that there are simple steps you can take which will ensure that you don’t ever fall into the trap of letting a good marriage be spoiled by money miscommunication.

We’ve seen enough beautiful marriages around here at Menden Headquarters, that I believe that I can put together a few commonalities of how finances are handled in some of the best of relationships — be they marriage, or otherwise…

Start saving when young. Every seven years you delay starting a savings plan cuts in half your ultimate net worth in retirement. Chances are that you know someone who’s getting married this year so send them a copy of this article. It may be more valuable than any check you write.

Budgeting together. Couples that share church activities or philanthropic causes do better financially because their common vision allows them to work together instead of pulling in different directions. They do well while doing good.

So, the more chances you have to do something which helps you to clarify your shared vision, the better the marriage team. Even the simple process of creating and adjusting a family budget provides a forum for discussion of what is really important to the family.

Realize that a budget brings freedom — not constraint. Couples without a budget can, and often do, fight over every dollar spent. But couples who have worked together on a budget are already in agreement on the big picture. Once the difficult decisions are made, the specific purchases in each category are much less critical.

Here’s one way this works (among many): Having decided how much money the family can afford to spend on clothes for him and for her, it doesn’t matter as much if he prefers lots of inexpensive clothes and she prefers a few nice pieces, or vice versa. A budget allows discretion and freedom to prevail within the context of cooperation and teamwork.

Pay your family first! Even if it hurts, at first, saving equals paying yourself. And don’t worry in the beginning overly much about where you’re placing your savings — only after you’ve saved several times your annual salary does the rate of appreciation become more important than the actual rate of savings. The main thing, early on, is to do it!

Because money makes money. And the money that money makes, makes even more money.

Limit the amount you spend unless you both agree. One big mistake can undo months of frugality and sacrifice. So it’s a good idea, that for big purchases, you require both members of the team to agree. Honoring each other in this way helps avoid resentment and disgust.

Have a small slush fund. Both members of a marriage should have a slice of the budget which is completely at their discretion. So long as their spending stays within this thin slice of the budget pie, they can be completely frivolous. Maybe it’s only 0.5% of your total budget, but it’ll provide a place to put purchases which otherwise might cause marital strife.

If one member collects ceramic pink pigs and the other signed collectible hockey cards they can both enjoy their frivolous expenditures without jeopardizing budget items that are more important to the family.

Couples that learn to live proportionately maintain their balance, whether they are rich or poor. No matter the circumstances, they include some fun, some gifting, and some investing as a reflection of their shared family values.

The other day, I received probably the 20th "Consider including _____ in your holiday giving plans" request of the season. I’m not tired of it (in fact, I welcome it), but it’s also pretty clear that these 501(c)3 organizations all sort of "get" simple tax planning!

So as a tax professional, it warms my heart to see all of that deductibility flying around through mailboxes and the interwebs, and I’m especially happy when I see clients step to the plate and actually give.

Last week, I wrote about those inevitable "last-minute tax moves" we tax professionals always spout off about around this time of the year, and (surprise, surprise!) one of the options was increasing your donations.

But I wanted to address this a little more specifically — because donating for tax purposes is good (VERY good) … but there are better reasons. In fact, the current White House administration continues to scrutinize reducing the deduction rate for charitable donations, as it seems to do every year around this time.

So we might as well consider what it would look like to give with a smaller tax deduction incentive for doing so (though I should hasten to add that these proposals are not yet set into law).

Roger Menden’s
"Real World" Personal Strategy
3 Reasons To Give Money Away, With or Without a Tax Deduction
There’s something that happens to your soul when you cut a big check to someone in need.

I promise it’ll be good.

All this said, above, I firmly advocate for being careful with your planning of said giving. I don’t suggest impulsivity, just some small risk-taking.

Brace yourself, because this blog post could hurt a little.

Let me start here: I’m writing this on Monday morning (Halloween), and the Occupy Wall Street folks are freezing their little tails off. The Northeast just got slammed with a snowstorm, and it’s not quite as fun as it used to be to hang out in Zucotti Park and hold protest signs.

Now, say what you will about these protesters (and there’s plenty to say), but one thing they’re certainly correct about is that higher education costs are a huge problem.

Tuition costs (not to mention living expenses) have been outpacing inflation for a long time (for example, see this chart, from actual data, and from even just two years ago: http://satyagraha.files.wordpress.com/2009/07/inflation-factors-2.jpg ) … so, plainly, something will have to give here.

But here at Team Roger, we have to live in the Real World — which means we approach the world according to how it *is* … not according how we WISH it would be.

And if you have children, that means it’s, um, time to start saving. Here’s what I mean…

Roger Menden’s
"Real World" Personal Strategy
Higher Education Bubble Blooming
According to the most recent College Board Annual Survey of Colleges, the sticker price of a college education keeps rising, faster than the price of groceries, health care and almost everything else in the basket of goods used to determine the Consumer Price Index (CPI). In the last 10 years, in-state tuition and fees at public four-year colleges increased 5.6% annually on top of a CPI growth of 2%. The average estimated total expenses for most public in-state four-year students (depending on the state) vary in the astounding range of $65,000 to $90,000.

S0, that means that if you were blessed with the birth of a child recently, you will need to save $430 monthly to pay for in-state college tuition, fees, room and board. Double this rate to cover the full costs at the average private institution. And this doesn’t even include money for a cell phone, pizza, room decor or other stuff that college students deem "necessities."

One last thing: I’m not a stocks advisor, but–I do NOT recommend prepaid college tuition plans. At best, they tend to match college inflation, and if used at an out-of-state institution, returns are based on money market rates, which are abysmally low right now.  Even worse … who knows? This bubble may just burst, and you don’t want to have locked into a tuition which might fall through the floor on its own some years from now.

In the course of our daily work around here, we not only work with numbers a LOT … but we also get a regular course on how people (our clients, mostly) *think* about those numbers.

Maybe it’s funny to you, but I not only make it my business to pay close attention to the tax code, and all of the political maneuverings around it — but I also like to think long and hard  about personal finance issues.

After all, so much of what we do comes down to the consequences of daily decisions. So, when clients give us the permission to advise them on more than just which tax credits to take, I want to have myself (and my staff) prepared to give them more than just the normal pabulum you find on Suze Orman.

In that spirit, I’ve decided to channel MY inner Suze Orman and deliver some advice which isn’t the "same old, same old" — and can help you think about how you’re handling your finances a little differently.

And, by the way, one of the BEST ways we can do this is to sit down with you to do some real tax planning. Taxes make up a serious chunk of every families’ expenditures — but too often families REACT, instead of pro-actively ACTING. Let us help you fix that…

Roger Menden’s
"Real World" Personal Strategy
Hidden Financial Mistakes … And How To Fix Them
You pay your bills on time. You try to save as much as you can. You even follow the advice which you read in books and hear on the radio about how to keep your finances in check.

Marketers are experts at this sort of price-anchoring, and we really should know better … but yet we still fall prey to it. Try not to let outside sources set up the comparison by which you should be considering such large purchases.

Meeting with clients this past week (and the week before) has been a blast.

No — really! And yes, I know, I should get out more.

The reason we enjoy doing this (especially this time of year), is that seeing the look on clients’ faces when we identify tweaks and quick moves which carry a significant ROI on their tax dollars … well, it’s worth all of the time we’ve put in to learning this craft.

Sometimes during these meetings, I’m duped into sharing some of the ‘private’ details on how I think about taxes, finances and investing for my OWN family. Yes, I do try to practice what I preach in these Notes to my clients and friends! (And yes, I do have a private life outside of tax forms.)

Enough people have told me that these back-of-the-napkin principles which I share have been helpful, that this morning I’ve been motivated to put some of them down for you in easy-to-digest form!

So, without further ado, Roger Menden’s Napkin Financial Strategies…

Roger Menden’s
"Real World" Personal Strategy
Economic Principles in Action for Your Family
Whether you’re running a Fortune 50 corporation, or just trying to keep your household expenses from exceeding your salary, the same basic financial concepts which I use in my personal life can apply for you. These are fundamental building blocks for wise financial decisions.

Again, this helps you make calls about your purchases — and your income. It’s the old "a bird in the hand" theory in action for your wallet.

There are just some stories where nobody comes out looking good — and this "debt ceiling" debacle is one of them, in my humble opinion.

Yes, a deal was struck. Congressional Republicans and President Obama both get to claim some credit for getting it all done … but let’s step back from it all and realize that this entire debate has revolved around an issue which has been almost custom-designed to accentuate that the way Washington DC "works" is different from how our families and businesses have to work.

When the conversation is mostly about "winners and losers" (e.g. see: http://www.washingtonpost.com/politics/the-debt-ceiling-deal-winners-and-losers/2011/07/31/gIQAHl7FmI_story.html ) — instead of "is this a sustainable fiscal model?", then Washington is really leaving us all behind, it seems.

Which is why so many of my clients tell me it’s nice to have a mediator, so to speak. A bit like being the real world’s ambassadors to IRS-land, we tame that tax code, with all of its committee-written language, and we’ve also found that these dog days of August are the PERFECT time to be reviewing our client information, and planning out adjustments to ensure that we’re pursuing the most advantageous tax strategies.

If you’d like to sit down, call us: 952-445-8753

I’ve also noticed that this debt ceiling debate has ramped up the worry level for some of my clients. So let’s talk about that today…

Roger Menden’s
"Real World" Personal Strategy
Money Worries
With all of the news about spiraling federal debt, it’s natural that Americans are taking a hard look at their own situation, and it sometimes leads to worry–even for those who are relatively secure.
 
Interestingly, my clients who have MORE cash in the bank often worry more! Funny, right? But it’s normal human nature….
 
You see, under all guidelines and measures, my finances are very solid. I’ve got a thriving business which is more secure than most people’s jobs. I work with numbers and am very good at taming balance sheets.
 
Yet, I still sometimes worry about money.
 
After a lengthy time of thinking, discussion and some more thoughts into the matter, below are a  few techniques I’ve settled on which can help us ALL reduce our worries over money.
 
1. Realize that It’s Exaggerated – Worry is a funny feeling – it seems to exaggerate any problem. While there are certainly many people who actually run out of money, those are usually not the people that tend to worry.
 
 2. Spend the Same Time Making Money Instead – If you are going to spend time worrying about money, why not use that time and get a side job instead? Maybe start a website (or two, or three). I know it’s easier said than done, but the more you work at it, the easier it gets.
 
3. Confidence – Part of the reason why we worry about money is because of the lack of confidence in our own abilities to earn an income. How can we boost our confidence you ask? Confidence comes from success, and success starts from taking action. So try a few low-risk entrepreneurial ventures. If they bomb, see it as a laboratory: learn from it and try again.

These last couple weeks, I’ve been ruminating on how the rich can "act" poor. And there have been a variety of responses — and the questions: "Roger, fine — but how about what it takes to teach wealthy thinking?"

A great question — and the internet abounds with answers, of course. "Abundance thinking", investment schemes, business ideas and many other such mechanisms clamor for our attention. But I like to think that the real answers are found in the wisdom of the ages — and the aged.

You see, our grandparents’ generation saw wealth-building as a more fundamental battle against our own worst impulses. And, could it be that the recent decade has proven their model to be more correct than we would like to think?

Now, I’m not taking a pessimistic view here … but I’m simply wanting us to "return to the ancient paths", so to speak, when it comes to how we pass along wealth-creating wisdom to our children.

So, at the risk of seeming old-fashioned, I’ve put together a tried-and-true method for teaching your children to grow their wealth, even now, but especially, as they move into adulthood…

Roger Menden’s
"Real World" Personal Strategy
How To Raise Wealthy Children
Sadly, too many families neglect a critical aspect of raising children: teaching them to be financially savvy. That said, many clients have written to say that they read and discuss my financial emails at the dinner table with their children. That’s a nice start.

So teach your children: Wait now … profit greatly later.

We’re all facing turmoil in this country, I think. And it’s not restricted to those who live month to month.

You see, I sit down every week with families across a wide spectrum of financial means, and sometimes I notice something interesting, even in the families of those with great resources.

In days like we’re facing, it might be a common temptation for my wealthy clients and friends to succumb to wrong thinking — the kind of thinking which they successfully avoided in order to attain the wealth they’ve achieved.

I thought it appropriate to put together a small series on "right thinking", when it comes to your resources. It may be a bit controversial, but I do hope you receive it in the spirit with which I write… (and, as usual, I’d love your thoughts!)

Roger Menden’s
"Real World" Personal Strategy
When The Rich Act Like They’re Poor (Part 1)
In my line of work, I often get to have deep and meaningful conversations with families about the things which they most care about. I LOVE those conversations, and I believe that understanding these deeper passions is "the only way to fly", when it comes to tax planning , and money management.

I will have more to say on this topic next week.

That’s a problem, and it could be costing you some serious savings.

Here’s an example:

Let’s say that you were considering taking money out of a pension (401k) to finance the down payment on a house.  It’s quite a common maneuver. But let’s say next that you do this withOUT discussing it ahead of time with a professional. That could be a four (or five) figure mistake.
   
If you were to come into our offices before such a move, I would ask you a few easy, but very important questions, and then (depending on the answer) likely advise you to first roll the money ($10,000) into a Traditional IRA.  You could then withdraw the money at a savings of $1,000.00. This is because money used for a first home, up to $10,000, is penalty-free when taken from an IRA, but NOT a 401K. 

Would you be pleased by that move? I’d guess "yes", especially if you knew about other clients I know of who failed to plan. This couple just learned of the $41,000.00 penalty they had to pay for doing the same thing, but from their 401k.

Ouch.

There is no guarantee that you will save by speaking to us in advance.  But this I CAN guarantee: If you don’t speak with us, we won’t be able to save you a dime.