Taxes Done? It’s Time for the Annual Financial Meeting

How To


Every year, after we do our taxes, my wife and I have a financial meeting.

The most important part of the annual family financial meeting is, of course, the snacks. Because, look, if you’re going to be sitting around with your spouse or partner for two hours talking about money, you’ll want nourishment. And by “nourishment,” I mean whatever empty calories the two of you find most relaxing. If there’s actual baking involved, so much the better.

The primary goal of the financial meeting is to make sure both of us are fully apprised of our current financial situation and to plot out—as best as we can in a messy and unpredictable world—what’s coming up in our financial lives in the next year or two. (And to eat cookies.)

Even if you’re single, it’s worthwhile to take some time once a year for what the New York Times calls a financial tuneup. It can save you some money, put your retirement savings on track, and make you a better baker.

The agenda

The financial meeting is good for topics that come up throughout the year but are too involved for a brief conversation, especially after work when we’d rather be watching Gossip Girl. It turns “should we…?” into an action item that can be checked off.

It’s not a judgment-free zone, exactly, but the meeting is a safe place to throw out even a crazy idea (“we should live on a boat!”) with the understanding that here, we can actually run the numbers and see just how crazy it is.

Here are some ideas for your own financial meeting; please jump in with your own in the comments.

* Big savings goals. Saving up for a down payment, an emergency fund, or a blowout vacation? How’s that going? Can you afford to put more toward the goal?

* Life insurance. Do you have enough? Are you paying too much for it? If you’re covered through a workplace plan, would it be more cost-effective to switch to individual coverage? (We did so this year.) Use Mint’s life insurance calculator and to figure this out.

* Tax tweaks. Now that you’re done with your taxes, do you need to change your withholding? If you got a big refund or paid a big bill, fill out a new W-4 (or change your 1040ES payments if you’re self-employed).

* Hopes and dreams. Have you been thinking about a career change (professional baker, perhaps)? Adopting a child? Taking a year off to travel the world? At the financial meeting, when the spreadsheets and calculators are out, you can evaluate the financial impact of those big decisions. A lot of crazy ideas have gone from “we could never afford that” to “just maybe…” during the financial meeting.

Making it happen

Looking back over the agendas of our past couple of financial meetings, my wife and I have had a pretty impressive hit rate. True, there are still a couple of moldy items from past years that I swear really, really will get done this year. (Wills and living wills? Still not up to date.)

Since this year’s meeting, which was two weeks ago, we’ve already:

* Changed our medical budget to deal with a minor condition that drained our Flexible Spending Account,

* Started the process of signing up for new life insurance,

* Made some long-overdue improvements to our retirement portfolio, some of which was invested in a high-cost mutual fund,

* Changed our college savings regime to direct some money toward our state’s prepaid tuition plan.

These changes involved much drudgery, and we (luckily) ran out of cookies long before we got very far into the list. But that’s the point: without the financial meeting, this kind of thing stays on the “to-discuss” list forever and never makes it onto the actual to-do list.

Rated NC-17?

Finally, what about the kids? Trent Hamm of The Simple Dollar says to give them a seat at the table:

“I am a big advocate of involving children in these meetings as early as possible, by age seven at the latest. Allow them to bring their own financial picture to the table – pay them an allowance, have them budget the money, and have them talk about their own successes.”

I hear where he’s coming from. But we pack our 7-year-old off to the babysitter during the financial meeting. I figure she knows plenty about the family finances already and is more likely to be annoyed than enlightened by participating in the meeting. If your children are interested and you feel comfortable with it, by all means include them.

Tell them there will be cookies.

Matthew Amster-Burton is a personal finance columnist at Find him on Twitter @Mint_Mamster.

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