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The Financial 'A-Team': Special-Ops for Your Money

If it’s one thing the financial crisis has taught us it’s that we should’ve asked a lot more questions about money.

The A-Team
The A-Team

Couples are increasingly getting over the taboo of talking about money, but it’s more than a spouse or a partner — you should be talking about money with a variety of people, from your parents, siblings, friends, to a “model” whose financial situation you admire — and a mentor who knows a lot more about money than you do.

Call it Your Financial A-Team. They’re the special-ops team that’s going to help you — and your money get where you need to go.

“Talking about money to the important people in your life forces you to come clean about the life you are living and … the way you manage your money,” said Katie Dunsworth, one of the “Smart Cookies,” a group of friends who formed a money group and now teach others how to take control of their money.

You have to acknowledge your mistakes, she said, and use your A-Team for life lessons, support and accountability.

1. Parents

First up — your parents. How many times have you heard your parents say, “I wish I knew then (at your age) what I now know.”

Well, demand that they tell you — while you’re still at “your age”! Even if they’re not comfortable telling you what they earn or what they’re worth, they can still offer advice based on what they think they did right and wrong.

“It's important for folks to ask their parents to explain why they made certain financial decisions,” said J.D. Roth founder and editor of GetRichSlowly.org. “As a kid, it's hard to see the big picture, and coming back as an adult to get clarification can be educational.”

Let’s be honest, your parents aren’t going to be around forever. Ask them those questions now while you can.

He also advises talking to your parents about their estate plan.

“Too many people ignore this, and it causes trouble,” Roth said. “I've heard story after story of families that are destroyed because a parent dies without a will. Talk with your parents about estate planning sooner rather than later.”

Quick check: What was your parents’ biggest regret about money — and are you making sure you are avoiding it?

2. Spouse

“The conversation with your spouse should begin long before that person is a spouse,” said Richard Barrington, a contributor to MoneyRates.com.

And, he says, it should cover everything income, assets, attitudes toward money and long-term goals.

“It’s not a romantic conversation, but it’s a key to a good marriage,” he said.

Dunworth suggests focusing on two keep components: How you manage your money and how you are paying for things.

Streamlining your finances through things like a joint account or using one shared credit card aren’t just for a one-income couple, they’re a good way to make sure you know what the family as a whole is spending — and pay your bills off every month.

If you’re not the “three-legged race” type, where you do everything together as a unit, that’s OK, too.

“What’s important is that both partners are honest about spending and saving, and that they're working toward shared goals,” he said.

Quick check: Do you know how much your spouse or partner has saved up?

3. Friends

Dunsworth and the other “Smart Cookies” were a typical group of women who talked about everything from love to shoes. But like a lot of female groups of friends, they talked about spending money — not saving it — and underneath it all, they were hiding a dirty little secret: Together, they had about $50,000 in debt.

Inspired by an episode of “Oprah,” they decided to form a money group, get all their debt secrets out in the open and vow to change — together.

“Many friends have a tendency to ‘one-up’ each other and feel pressure to keep up appearances,” Dunsworth said. “Coming clean about the kind of debt you are in, and what you can realistically spend on things like dinner, gifts and travel is important. You may actually find your friends are in the same, or even worse position, and find it refreshing to hear your honest financial situation.”

So, the next time you think — how did he afford that car? Or how did she afford those shoes? Just remember: Maybe he or she can’t. It’s not your job to keep up with your friends, but to keep up with your income and savings.

And, if you’re talking about money regularly, you can offer each other tips on how to save money on everything from clothes to checking-account fees — and what you did right or wrong when buying a house.

Once they came clean, the Cookies developed strategies for turning their finances around and, like a Weight Watchers group, helped keep each other on track. On their web site, they offer goal-setting toolsand tips for how to start a money group.

Quick check: Do you know how that friend you envy he was able to afford that car, or those shoes?

4. Siblings

There’s a level of trust that comes with immediate family that’s hard to replicate with friends. You can use that to your advantage in discussing money with siblings.

You’ve been conspiring with these people since you could talk — all that valuable teamwork can come in handy when it comes to money! And don’t let that sibling rivalry go to waste — Try to one-up each other when it comes to paying off debt, savings and planning for retirement.

Roth suggests regular discussions with your siblings, whether it’s a phone call or dinner, to discuss where you’re at with your finances, check in on goals — and keep each other out of trouble.

That’s particularly important for siblings who may be going through foreclosure, bankruptcy or other financial calamity. They’ve seen you at your best and worst, so there’s no need to be embarrassed if you’re going through a hard financial time. Just like when you skinned your knee, a sibling can help patch you up, and maybe even offer a funny, yet poignant story of the time they skinned their knee.

Quick check: Do you know your brother or sister's best money tip?

5. Model

As you get older, the friends and family members who are successful with money start to break out of the pack. The problem is, you often don’t know who these financial superstars are until they’ve bought their first house at 25 — and their second one at 29.

If this happened when you were playing a game as a kid, you could just ask for a mulligan. But this is real life and, unless you’re a cat, you only get one shot.

Mr. T
Getty Images
Mr. T

If you’re talking about money on a regular basis with friends and family members, you’ll be able to identify these early breakout stars — and emulate their winning strategies.

Identify your “model,” a person whose financial situation you admire — whose track you want to be on — and start to ask questions about what they’re doing, how they’re saving, how they’re investing.

If there’s no one within a 500-mile radius whose financial situation you admire, take advantage of that series of tubes connected to your computer — and track someone online who can be a money model. There are no shortage of personal-finance wizards who write books and blogs about their winning strategies. Read as much as you can and email them with any questions.

Quick check: What’s your model’s main money goal? Quick, list three things they’re doing to achieve it.

6. Mentor

A mentor is someone like an uncle who’s a personal-financial adviser or a former boss who has been successful when it comes to money.

“Few people have a money mentor but finding one can be a great way to kick start your finances,” Roth said.

A mentor is someone that you should have some personal connection with, Dunsworth said, but who is willing to spend some time with you in a formal capacity to help you identify three top goals when it comes to money — and a timeline for achieving it.

In the process, a mentor can provide valuable advice and tips based on the successes and mistakes they’ve made with money.

“Anyone can be a money mentor really,” Roth said. “One of my mentors is the neighbor across the street. Another is a fellow writer here in Portland. Another is my accountant,” he said.

And don’t wait for them to come to you: “If you know of someone who’s better at money than you are, strike up a casual conversation about the subject. If they seem agreeable to talking about money, offer to take them to lunch,” Roth suggested. “For $20 and an hour of your time, you can pick up valuable tips on how to become a better money manager.”

Quick Check: What’s the secret to your mentor’s success? What’s one way you can implement that secret in your own life?

Regardless of who’s on your Financial A-Team, the goal is that you come up with a list of goals and your team helps you devise a strategy to achieve those goals — and stick to it.

As Hannibal used to say, “I love it when a plan comes together.”

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