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How to Have Hard Money Conversations

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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When it comes to money, 61% of women would rather talk about their own death, according to a report by Merrill Lynch and Age Wave. Meanwhile, 43% of people in a Fidelity study failed to correctly identify how much their partner makes.

If money is something we all deal with, why is it so hard to discuss? “It’s a really delicate issue because we all have different needs and priorities when it comes to finances, and what one person may value to save and protect might not be the same with someone else,” said Lizzie Post, great-great-granddaughter of etiquette guru Emily Post and co-president of The Emily Post Institute. “Plus, even if we’re comfortable sharing, we’re aware that other people might not be.”

Of course, not talking about money isn’t really a viable option, especially when it comes to the important people in our lives, and having those hard money conversations can actually lead to a better understanding of how to manage financial issues with other people. No matter who you’re talking with, Tammy Butts, regional executive vice president and branch manager for AXA Advisors, suggested following three rules:

  1. Start early. Whether it’s a spouse or partner, your children or a roommate, the sooner you can start having money conversations, the better — “you want to ultimately have them before you’re at the crossroads.”
  2. Develop a plan. When you develop a strategy, it allows you to make solid financial decisions. A good strategy to start with is determining the important financial information you’ll need before moving forward with a conversation. Depending on whom you’re talking to and what you’re discussing, you may need to share specific details about assets, where that money is kept and what you plan to do with it.
  3. Keep communicating. One conversation is a good start, but in some cases you’ll need to talk more frequently about a particular topic. Communicating frequently about and updating your plan as necessary will allow you to make decisions and stay on track.

Besides following those three rules, understanding the etiquette and psychology behind money conversations with different types of people in your life will help you ace those particular talks the next time you need to have them.

How to talk about money with your partner

Why it can be difficult: When it comes to your partner, you could be discussing pivotal issues that greatly impact you both, like how to handle debt, how you’ll split shared financial responsibilities and whether or not you’ll be combining your finances. “When we think about equality in relationships, this is one of those places where people can feel a big divide depending on how they’re willing to contribute and see their differences,” Post said.

From an etiquette perspective: As far as etiquette goes, Post suggested coming at any conversation with your partner from a place of understanding. “Take a minute to say, ‘I know this person, but I may not know how they feel about financial matters,’” she said. “That often puts you in a place of being willing to ask questions, rather than just make statements.”

Post suggested asking your partner when a good time would be to discuss a certain financial topic, rather than demand it happen in the moment. For instance, asking if they’d be willing to sit down and have a conversation about managing joint expenses, rather than declaring that it’s time to open a joint checking account. It’s important to also ask your partner to be willing to talk about what their ideas might be and what their expectations are: “You’re trying to create a space where you’ll gather all the information about each other, rather than just come up with a solution right off the bat.” As Post noted, it should be about creating a safe space to first put forth ideas, even if you don’t come up with a solution right away.

From a financial perspective: According to Nathan Astle, student board member of the Financial Therapy Association, it’s important to remember that because money is driven by so much emotion, you should go into the conversation with a certain amount of preparation for emotional responses, for both you and your partner. Remember to speak for yourself with phrases like, “I feel,” instead of “you are,” validate their point of view (even when you disagree) and take a break if the discussion gets too heated (with the expectation that you’ll come back to the topic once you’ve cooled down). Keep the end goal that you’ll talk about what you want to get from the relationship and how you believe money can help you get there, he added.

Using a budgeting app can also help keep everything in one place so conversations are easier moving forward — here are 11 good ones that are totally free.

How to talk about money with your kids

Why it can be difficult: The types of conversations you have with your children will depend on their age, but talking about subjects like saving, credit and debt can make a big impact in your kids’ lives. In fact, while two-thirds of Americans say their family or parents influenced their saving and spending habits, only 56% of American parents said they have actually talked with their kids about money, according to a Chase survey.

From an etiquette perspective: As with your partner, Post advised to always invite your child to have a financial conversation before actually having it. Say something like, “I’d like to talk with you about your allowance, and your mom and I have some ideas and wanted to talk with you about what we’re thinking.” Depending on your plan of action, you can also let your kid know if you’re open to suggestions (as in, “Mom and I have some ideas about your allowance and wanted to get your opinion”).

From a financial perspective: Remember to always keep your kid’s maturity level in mind before bringing up emotional financial topics. “When children are involved in adult financial matters too soon, serious problems can occur,” said Sarah Swantner, a certified financial planner and financial therapist in Rapid City, South Dakota. Instead, “have age-appropriate conversations around money and involve kids in money activities that are rooted in real life, like saving for a much-wanted toy or doing chores to earn money,” said Swantner. “But keep them out of the family financial stress.”

Butts also reminded parents that talking to their kids about money shouldn’t end as they age. “Talk to them about saving when they’re in grade school and college and as young adults, as well,” she said. “I see my clients with their kids, and I have the same discussions with my own adult children about credit. It’s so important we keep educating these young people.”

How to talk about money with your parents

Why it can be difficult: At a certain point, the parent-kid conversation flips and it becomes the adult child’s responsibility to potentially talk about some uncomfortable money topics with their parents — these could include anything from legacy planning, taking over finances or overspending in retirement. It can be especially difficult if there is a history with your parents of not talking about money, Swantner said.

From an etiquette perspective: Much like the conversations before, Post suggested that any financial conversation with your parents should start with a request. “Ask permission to have the conversation, and when you get it, ask to what degree they are comfortable talking about it with you — let them know you don’t want to overstep your bounds,” she said. Always thank your parents for sharing whatever they’re willing to, and ask if you can revisit the topic again in the future to touch base and make sure things are staying the same, or to address them if they’ve changed.

From a financial perspective: The sooner you can start talking about some of these important topics and getting the infrastructure in place, the better. Still, Butts admitted that this is the topic where she tends to see the most difficulty and friction. “You don’t want any surprises, and the more you can make some of these decisions in advance so you don’t have any, you can hopefully have more harmonious outcomes,” she said. “This is where getting an advisor as a neutral third party can help facilitate those conversations.”

Without the help of a third party, however, Swantner suggested sticking to the facts. “Avoid judgments and evaluations,” she said. “Focus your conversation on yourself and not the other person, making your concerns and requests for information clear. If your parents realize they will be helping you by sharing the information, they may be more likely to open up.”

How to talk about money with your friends

Why it can be difficult: Talking to people our own age about money can bring up feelings of inadequacy if the scales seem tilted in one direction. In fact, 44% of people in a Bank of American survey said that money was a major cause of stress in a friendship.

From an etiquette perspective: You can make your life a whole lot easier by being direct with your friends about certain financial situations. “I find there are less assumptions made about me if I open up just a little bit about whether budget is or isn’t a concern,” said Post. She suggested trying something like: “Johnny, I would so love to celebrate your birthday. Financially, I’m trying to stick to my budget, but I would love to have you over for a cup of coffee for some one-on-one time.”

From a financial perspective: Keep in mind that taking some initiative can prevent most difficult money conversations with friends from happening in the first place. “Before everyone starts ordering, make sure that you are okay just splitting the bill so everyone pays for what they bought,” Astle said. There are plenty of apps available to help make splitting the bill less painful. If lending money is the issue at hand, Astle noted it’s always best to treat those situations as you would any other legal transaction. “That takes some of the hard emotional stuff out of the conversation since it keeps you, your money and the relationship safe.”

How to talk about money with your roommates

Why it can be difficult: Chatting with roommates about financial topics can be tricky, since the areas you’ll likely be covering — rent and other shared financial responsibilities — impact all parties on a daily basis. Plus, living with someone you’ve had an uncomfortable money conversation with can be downright unbearable.

From an etiquette perspective: Talking early and often is key to keeping problems at bay, but if a problem does arise — like someone missing rent, for example — it’s best to address the issue from a standpoint of “how are we going to solve this,” rather than from a place of anger, said Post. Again, you’ll want to ask for permission before having any conversation, and setting up a roommate talk on a monthly basis can help assure everyone stays on the same page.

From a financial perspective: If you have several roommates, Astle suggested treating any conversation like a family situation where everyone has equal say and everyone spends time trying to understand each individual. “It works wonders when people feel understood,” he said. Butts also recommended communicating up front that any money conversations between roommates should be about business versus personal. “If you can start by saying, ‘Let’s make this a business transaction,’ now it’s nobody pointing fingers — instead it’s about here’s what’s needed, here’s what everybody shares and here’s when it’s due.” Butts also suggested setting consequences ahead of time so there are no surprises, and potentially even putting it in writing and having everybody sign. “That way, if someone violates it, they knew, and now you aren’t just picking on them,” she said.

The bottom line

Whether you love ‘em or hate ‘em, at the end of the day, certain financial conversations become inevitable. Taking some time to understand the best approach in each scenario will help everyone come out of a money talk unscathed, and with the relationship still in tact.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Survey Reveals How Consumers Will Spend Stimulus Money: Groceries, Bills and Savings Top the List

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

In the face of the coronavirus pandemic, many Americans are dealing with furlough, unemployment, reduced pay or climbing health care costs. To offer support, Congress has passed a historic $2 trillion relief package that includes direct payments for eligible Americans.

With millions of taxpayers slated to receive relief checks in the coming weeks, many are making plans for how to spend the unexpected windfall. A new survey from MagnifyMoney of more than 1,000 Americans reveals that for most, the relief check is a necessity. Nearly half of survey respondents said they plan to use the money on essentials like groceries and bills, underscoring the current fragile state of Americans’ finances.

Key findings

  • We asked consumers how they’ll spend their stimulus check, should they receive one. The top two responses were paying for groceries and paying for bills. Additionally, 44% plan to save at least some of the money.
  • The checks are a necessary reprieve for most of the survey respondents, as nearly 7 in 10 (69%) said they need the stimulus money. Another 26% said that while they don’t necessarily need the money, it will help. Just 6% said they don’t need it.
  • While many said the check will help, they aren’t necessarily certain it will be enough. Most of our respondents (40%) said the stimulus check will relieve “a few” of the difficulties they’ve been facing, while 10% said they’ll still be experiencing a significant level of financial difficulty. The good news is that 18% said the stimulus money will remove all of the difficulties they’re facing due to the pandemic, and another 17% said it will alleviate most financial difficulties.
  • Consumers are split in terms of satisfaction with the monetary value of the stimulus checks. About 41% think the check amount is “just right,” though 39% think it’s too small. Only 4% thought the amount was too large.
  • About half (49%) of respondents agree with the income limit proposed by the government. However, 21% think the threshold should be lowered so that higher income individuals would receive even less. On the other hand, 11% said there should not be an income limit.
  • Some will have to wait longer than others to receive their funds. About 8% of our survey respondents don’t have a bank account, which would slow down the time it takes for them to have access to those funds because they’ll be waiting for a check to arrive in the mail instead of the funds being direct deposited in their bank account. Meanwhile, less than 60% have direct deposit set up with the IRS.
  • Nearly all consumers we surveyed (85%) think the government’s plan is a good idea. The intention of the stimulus checks is to help counter the negative financial and economic impacts of coronavirus.

How Americans are spending their stimulus checks

Our survey found that the stimulus checks, being distributed as part of the coronavirus relief package, are acting as a safety net for many Americans. When we asked respondents what they plan to spend their stimulus check on (they could select all answers that applied), the top two answers were to pay for groceries (45%) and to pay for bills (43%).

Meanwhile, we found that 29% of respondents plan to use their check to make their rent or mortgage payment, 26% are going to put some of it in savings and 18% plan to put all of the money in savings.

Generational and income-level differences in stimulus check spending

When looking at how different generations intend to spend their relief checks, we found that millennials were more likely than any other generation to say that they plan to use their relief check to pay for bills (49%) and to pay their rent or mortgage (37%). Understandably, the youngest generation — Gen Z — was the age group most likely to plan to use their relief check to pay off student loans (11%). They were also the generation most likely to put either all of their check in savings (21%) or most of it (39%).

Our survey also revealed that households with lower incomes were, for the most part, more likely to use their relief checks to pay for necessities, such as groceries, bills or housing costs. Meanwhile, we found that 7% of households that make $100,000 or more annually plan to donate their entire relief check to charity or someone in need.

Americans that need stimulus checks the most

Overall, our survey revealed that the relief checks are much needed, with 69% of survey respondents saying that they personally need the financial assistance. That’s in comparison to 26% of respondents who said that they don’t really need the check but that it will help and just 6% who say they don’t need it at all.

Across all generations, the overwhelming majority of respondents said they indeed needed the relief payment. However, Gen Zers were far more likely to say that they didn’t need the relief check (10%) compared to millennials, Gen X and baby boomers. One possible explanation for this could be that Gen Zers could have parents or other older adults supporting them financially. Not surprisingly, our survey also found that households with less than $25,000 in annual income were far more likely to say they needed the relief check (80%), compared to 50% of households that make $100,000 or more.

Of survey respondents who said they did not need the relief check, nearly half (45%) said they still do not feel guilty about receiving one. However, 10% of those who said they do not need the check admitted to feeling guilt over receiving the check and plan to donate it. Another 10% that feel guilty, though they still intend to use their check. Meanwhile, 35% of respondents who said they don’t need a check don’t expect to receive one — which are likely people who make too much money to qualify.

Do Americans think the stimulus checks are enough?

While Congress moved swiftly to provide relief to families facing financial turbulence, our survey found that many Americans (39%) do not think the checks are enough. The checks are for up to $1,200 per eligible adult and up to $2,400 for couples filing joint returns, with an additional $500 per child under the age of 17.

Though many are dissatisfied with the amount of the checks, 41% of Americans think that the amount of the stimulus checks is just right. Another 4% even said that the amount is too much.

As for the income thresholds that apply to the relief checks — which start at $75,000 for individuals and $150,000 for jointly filing married couples — nearly half (49%) of survey respondents said that they agree with the U.S. government’s decision to implement income thresholds as well as with the income limits they chose. Another 21% agreed that there should be income limits but thought those limits should be lower, while 9% thought the limits should be higher. In contrast, 11% said that there should not be an income limit at all.

As a glimmer of good news, our survey found that the majority of respondents (74%) said that the relief checks will help relieve either some or all of the difficulties they’ve been facing as a result of the coronavirus pandemic. However, 10% of respondents said they will still be facing a significant level of financial difficulty despite the relief check.

When will the stimulus checks go out?

On March 30, the IRS announced that payments will be disbursed within the next three weeks. Those who chose to receive their tax refund via direct deposit, as opposed to mailed checks, can expect to receive their relief check faster.

If you did not share your bank account information with the IRS when filing your taxes, the Department of the Treasury plans to open an online portal that will allow you to share your direct deposit information with the IRS, enabling you to get your relief check faster.

What you should do with your stimulus check

While our survey’s findings revealed that many taxpayers already plan to spend their stimulus checks on necessities like bills and groceries, some might feel uncertain about how to prioritize competing financial needs. Matt Schulz, the chief credit analyst for LendingTree, acknowledges there is no one-size-fits-all answer when it comes to how people should use their stimulus checks, but says it’s important to carefully plan what you do with it.

“If you can put some of the check away to start an emergency fund or build up your current one, that’s probably ideal,” Schulz said. “That’s not reality for millions of Americans, though. For many, this will be about keeping the lights on or putting food on the table. That’s why these checks are so, so important.”

If you’re focused on using your check to demolish debt, Schulz emphasizes the importance of having an emergency fund in place as well. “It’s obviously great to pay down debt, but far too often, people pay off debt and have no savings at all,” Schulz said. “That means that if an unexpected expense comes up, that cost goes right back on the credit card and the person is right back in debt. Having even a little bit of cash in savings can help avoid that situation.”

If you’re on good financial footing, Schulz points out a number of good uses for that money, including:

  • Growing your rainy-day fund
  • Paying off credit card debt
  • Bulking up your retirement savings
  • Supporting your community by spending on small businesses or nonprofits

Methodology

MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,038 Americans, with the sample base proportioned to represent the overall population. We defined generations as the following ages in 2020:

  • Gen Z: 18 to 23
  • Millennials: 24 to 39
  • Gen X: 40 to 54
  • Baby boomers: 55 to 74
  • Silent generation: 75 and older

The survey was fielded March 26-27, 2020.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Places Where Taxpayers May Wait Longer for Their Stimulus Checks

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

The CARES Act stimulus checks may offer some relief to taxpayers amid the coronavirus outbreak, but distribution may pose a problem for the millions who don’t use direct deposit to receive their tax refunds. In 2019, 19.8 million taxpayers waited longer for their tax refunds to arrive via paper check. Today, these same taxpayers will have to wait longer again — potentially up to an additional three months — for their stimulus checks.

MagnifyMoney looked at the 100 largest metro areas in the U.S. to determine where taxpayers used direct deposit the most (and least) to receive their 2018 tax refund. Cities with the highest percentages of check-receiving taxpayers are where people will likely wait longer for financial relief to arrive.

Key findings

  • Visalia, Calif., has the highest percentage of taxpayers that will have to wait a little longer for their relief rebates. About a quarter of taxpayers there (25.9%) didn’t use direct deposit to receive their tax refunds in 2018.
  • Fresno, Calif., isn’t far behind — 23.4% of taxpayers there will likely have to wait longer for a check.
  • While Visalia has the highest percentage of check-receiving taxpayers, the New York City metro area, which ranks 11th, has the highest total number of taxpayers who received a check refund in 2018. Approximately 1.78 million taxpayers in the New York City area may have to wait for a paper relief check, compared with the 46,330 taxpayers in Visalia.
  • Oklahoma City and Tulsa, Okla., were the only two cities out of all the metro areas we looked at where the percentage of check-receiving taxpayers was under double digits. Only 9.8% of taxpayers in Oklahoma City and 9.6% of taxpayers in Tulsa didn’t use direct deposit to receive their tax refunds in 2018.
  • When it comes to the actual number of taxpayers waiting the longest for their stimulus checks, our 93rd-ranked metro area of Davenport, Iowa, has the smallest number of check-receiving taxpayers. In Davenport, 21,690 taxpayers will wait longer, or 12.2% of the metro area’s tax-paying population.

Where taxpayers may have to wait longer for their stimulus checks

On the map below, you’ll find the 100 largest American metro areas ranked in order of highest to lowest percentage of taxpayers who opted to receive their 2018 tax refund by check. The places ranking highest on the list are where taxpayers are most likely to experience delays receiving stimulus payments, given the lag in getting a paper check in the mail compared with money that’s direct deposited into your account.

Taxpayers in California are more likely to be left waiting for their stimulus checks, with half of the top 10 metro areas located in the Golden State. This includes Visalia, Fresno, San Jose/San Francisco, Modesto and Sacramento.

The cities in the bottom 25 — where the lowest percentages of taxpayers within the 100 largest metro areas received refunds by check — are scattered among states in the South and Midwest. Tennessee taxpayers, in particular, seem well-positioned to receive their relief payments quickly — four metro areas in the bottom 15 are in Tennessee, including Chattanooga, Nashville, Johnson City and Knoxville.

What to do if you didn’t use direct deposit

If you’re one of the millions of U.S. taxpayers who don’t use direct deposit for your tax refunds, there are some actions that you can take and options available to ensure you receive your economic impact payment sooner rather than later.

1. File your 2019 tax return as soon as possible

The IRS will distribute these economic impact payments according to the information on taxpayers’ 2019 or 2018 tax returns, whichever is most recent. They will pull your income information as well as your payment method, whether that is direct deposit or paper check. You will need a valid Social Security number to be eligible for the payment.

If your information has changed since your 2018 tax return, it’s best to file your 2019 taxes before the IRS starts automatically sending out payments within the next three weeks. Expediting your filing is even more beneficial when you’re expecting a tax refund, which can provide some extra cash relief. However, the federal tax return deadline has been extended to July 15, 2020.

Individuals who typically don’t have to file a tax return do not need to file a simple tax return to receive the rebate. Instead, the IRS will pull information from Form SSA-1099 or Form RRB-1099 to determine benefits for senior citizens, Social Security recipients and railroad retirees. If you do not typically file a tax return but do not use those forms, you may want to file a simple tax return anyways.

2. Provide your banking information to the IRS online

The U.S. Department of the Treasury is expected to release an online portal “in the coming weeks” for individuals to provide their banking information to the IRS. This will allow you to easily update the IRS on any changes to your banking information.

You can check the IRS’s coronavirus information page for the latest updates.

3. Open an online bank account

Unfortunately, the reality in the U.S. is that about 8.4 million households don’t even have a checking or savings account into which they can direct deposit their tax refund according to the 2017 FDIC National Survey of Unbanked and Underbanked Households. These tend to be lower- or volatile-income households, meaning those already vulnerable and at-risk households may have to wait longer for the government’s stimulus payments to arrive.

If you or someone you know does not have a bank account, consider opening an online bank account so you can more quickly benefit from the stimulus payments. Online bank accounts are less likely to charge monthly service fees, which is often a reason why households are unbanked in the first place. Online savings accounts are also more likely to pay more in interest, which means your money grows while staying safe inside the account. Plus, opening an online bank account doesn’t involve visiting a bank branch, so you can maintain social distancing.

If you’re having trouble opening a traditional bank account due to a rocky financial past, second chance bank accounts are made to help you get back into the banking world. Issuers of these accounts have less strict background requirements, which opens up the opportunity to continue banking even if you have a history of account closures. These accounts are more likely to come with fees, however, which helps issuers cover potential losses.

Methodology

In March 2020, MagnifyMoney examined local-level 2018 tax filing season data from the IRS to identify where taxpayers in each of the 100 largest metros were more and less likely to receive their tax refunds by direct deposit.

For more information on the rest of the stimulus package, refer to our hub page.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.