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Tax Season 101

10 Money Conversations Everyone Should Have

Essential talks to have with your spouse, your kids, and your parents.

By Walecia Konrad
Illustration of people talking about moneyWesley Bedrosian

Are Our Retirement Plans on Track?

Why it’s important: After the recent stock-market downturn, most people’s 401(k)s look more like 201(k)s, says Goldsmith.

The ideal time to talk: As soon as you can.

What to do first: Open your account statements. With all the bad economic news, it’s tempting to ignore them and remain on autopilot.

How to bring it up: Get right to the point. “I have been looking closely at our investments, and I’m worried we won’t be able to retire at age 65” will certainly get your spouse’s attention. Then quickly follow with “Let’s figure out how to get back on course.” An online retirement calculator (like the ones at money.cnn.com) can help. It might also be a good time to schedule an appointment with a financial planner who can offer objective advice and make sure you don’t overlook any options. (Find a licensed one at fpanet.org.)

What Is Our Risk Tolerance When It Comes to Investments?

Why it’s important: If one of you thinks that there is a fortune to be made in the market and the other can’t stand the idea of losing a cent, you will be tempted to keep changing course and never meet your investment goals. Teamwork, people!

The ideal time to talk: Natural times to bring this up: during tax season, when you’re looking at your investment income, and at year’s end, when many people reevaluate their finances. But just checking your portfolio online can offer a chance to raise the subject.

What to do first: Learn to speak the lingo, says Puhn. Read some articles or books on investing, such as Jonathan D. Pond’s You Can Do It! ($10, amazon.com), and Smart and Simple Financial Strategies for Busy People, by Jane Bryant Quinn (Simon & Schuster, $21, amazon.com), and you’ll see that knowing your risk-tolerance level―whether low or high―is essential to successful investing. (These books will also help you assess your tolerance.) While you’re at it, adopt non–Chicken Little terms, such as “risk tolerance,” instead of saying, “I’m scared we’ll lose all our money!” Try to temper your emotions.

How to bring it up: If you’re the one who is averse to making risky investments, simply state that you are not comfortable with having such an aggressive portfolio. If you’re the more aggressive one, ease into it―you don’t want to scare your partner off. Saying something like “I think we’re missing enormous opportunities because we’re too conservative” should help get the ball rolling. Either way, both of you should be prepared to find a middle ground, says Puhn, for the sake of your relationship, if not your portfolio. (After all, these days, who can predict what will happen to that?) Meeting with a fee-only financial planner (who won’t steer you into investments that pay him the highest commissions) can also help you find investments and formulate long-term savings goals that you are both comfortable with. 
 
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