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Hello, everyone and welcome back to an all new episode of The Financial Confessions.

And this week's video is brought to you by our own Society at TFD. If you haven't joined yet, there is so much that you're missing.

We have our monthly office hours with me where you get to ask me anything you want. We have our monthly book club hosted by my colleague, Holly where society members themselves choose the book they want. And then we all discuss it together.

We have tons of other stuff, too but perhaps most important is our monthly members only bonus video, which comes out one Tuesday every month in place of the video that's free for everyone. So if you haven't joined, hit that Join button right below this video, and we'll see you at the society at TFD. It is I Chelsea Fagan, founder and CEO of The Financial Diet and woman who loves to talk about money.

And I am, as you can maybe tell if you've watched other episodes recently, and are watching on YouTube still in sunny Los Angeles. I have gotten away from what is very spooky weather back in New York City enjoying that vitamin D just streaming down relentlessly upon me and speaking to a whole bunch of really, really cool people out here in LA. Now, for the most part, I did want to target people who were either kind of unique to the industry like in the case of one broke actress or in a category that we may not have as much access to in New York City.

But I also wanted to make sure that we were talking to some just straight up, true blue, down to the bone personal finance people who can answer all of the personal finance questions that you guys have and which is at the end of the day, as much as we're out here talking about fitness and dividing labor in the home and acting and all of that other stuff, the very core of who we do here at TFD. So I wanted to bring out a guest that we've known here for a while in Southern California. She's actually based in San Diego but did make the trek all the way up to LA, which in and of itself is just iconic behavior.

She is actually a CFP and a CFA she is all of the experts when it comes to all things money. She's also launched her own personal finance app, which she's going to talk about a little bit as well. But mostly, she is here to be our little impromptu personal finance advice columnist and specifically to answer the questions that you guys sent into us, which are awkward, embarrassing, unusual, and just generally the kind of thing that let's just say you maybe don't want to bring up face-to-face to your own financial advisors whether they be professionals or just the person in your life you happen to trust with money.

This is a safe space. This is our secular version of financial confessional but without further ado, let me introduce you to our expert and our advisor, Tara Falcone. Hi, thanks for having me.

I'm excited to be here. I'm excited to have you. Welcome so obviously, I just gave the little acronyms of what you do, but could you quickly explain to our audience who may not.

What is a CFP and a CFA? Yeah, so a CFP is a certified financial planner professional. And that is somebody who is really trained to look at your entire financial life in a holistic way, big picture and help you figure out how to put all of the pieces in place so that in the next year, next five years, next 10 years, you're really on the right path to achieving not just your short and medium term goals but also your long term goals as well.

So a CFP is trained to focus on everything from budgeting, to credit, helping you pay off debt, helping you save and invest for retirement, as well as looking at things like your insurance policies to make sure that all the hard work you're doing by earning income and budgeting that income and investing that income, that it's really protected from all the elements in Murphy's law that really come at you during life. And so basically that gives me like the really big picture view. And then I also became a CFA charterholder, which is a much more technical investing designation.

Because I really want to understand how well as a former hedge fund analyst myself, like how investing can fit more into everyone's daily financial life outside of just retirement. And so a CFA is really trained to look at all the different types of asset classes, stocks, et cetera, what makes them move, how to look at recessions and bull markets, and how to figure out what investing moves you should be making during that. But then also, technically, people with a CFA designation can run a mutual fund.

So it can be really broad spectrum, everything from like private wealth management to the nitty gritty of running a mutual fund. Damn, OK, very bad ass, I think we can all agree. And as I mentioned you have your own app that you've created.

Can you tell us a little bit about that? Yeah, I'd love to. So Reason is a goal-based investing platform that helps you invest towards your specific financial goals, everything from a spin bike to home down payment all the way to retirement in a more intentional and organized way.

And so basically, what you can do with Reason is sync your existing investment accounts, everything from a brokerage to an IRA to your 401(k) and actually divvy up your investments into different buckets for each goal. And the reason that is important and you find yourself saying the word reason a lot more after I tell you about this, but the reason that's important is because each goal that you have is unique in terms of the time horizon that you want to achieve it on but also the risk tolerance or level of significance that you would have for that goal. So if I'm saving and investing for a spin bike, and the market crashes, it's not going to really negatively affect my life if I don't get that spin bike.

Whereas something like a home down payment that's very important to you that you want to achieve in three to five years should be invested for differently because of its level of importance and the time horizon on which you want to achieve it. So we see, I think it's interesting you see savings buckets on these kind of internet or online savings apps that you can create different buckets for different goals for savings that hasn't really transitioned into investing yet and as a CFP CFA, that's exactly what I think should exist. You should have a different strategy for each of the different savings and investing goals that you're working toward.

And that's what Reason allows you to do. I love it. Well, so as I promised, we sourced a lot of questions for you guys.

I sourced them personally. We source them on TFD. We got a huge amount of questions and we will not have time to get to them all.

But I'm going to get to as many as I can. So and these are off the dome. I have not sent these in advance.

So listen. Your reaction is part of the fund. So I want to just get your real honest take on these.

And just as a reminder, this is not like individualized financial advice this is a disclaimer, big disclaimer we're speaking in generalities here. We'll start out with some easy ones. Doesn't the bank already track your money?

Why do I need to write it down again, which is such a funny question. That is a very funny question. So a bank will track your transactions.

However, in many cases, there are things that happen or that may happen where the bank doesn't know if it's a fraudulent move or not. So the bank doesn't know if you made that transaction or that move with your money versus someone else. And actually, I'm happy to share a personal story of where that happened and how my own like financial vigilance really saved the day.

So in San Diego, we have this amazing apartment that we pay way too little for somehow. Thank you, Ron, our landlord. And he called me one day.

He's much older. And so we sent, well, we used to, send our rent check in actually write out a check and mail it in every month to him. And I would always send it in the 21st or 23rd, so it's due on the first.

And he called me on the fourth of the next month. And it was like, hey, something happened. You're always so on time.

I didn't receive your rent check. And I was like, that's weird. I definitely sent it, and I have a record of sending it because you have carbon copies on your checks and whatnot.

And so I look into my own bank statement and I realized that it was cashed. But actually, the name that was written on the back the signature who endorsed, it was some guy named Carlos. And that is not the property manager that we send the money to.

And so I immediately called the bank and was like, hey how did you allow this to happen? And they realized that had happened. There was also another situation literally a week later.

I don't know why I was targeted so heavily kind of in this very short time frame were in my business bank account, actually. I log in, and I check that every few days actually just make sure kind of cash flow is being managed appropriately. And there were two fraudulent charges randomly on that account as well using a business debit card that we have literally never used.

You get it when you open the bank account, and it just sits in a drawer or something. And I noticed it was the first one was for $100, so they're testing how much what your limit is on your card. And then the next one was for $1,000.

They're like oh, how high is this limit? How much could we get from this? And then I kid you not, the next one was for $4,700, a fraudulent charge on a card that if I wasn't looking at my statements all the time or looking at my bank accounts, I wouldn't have caught as quickly as I did.

Because I caught it really quickly, they were able to put a stop on that card and refund basically give me a refund for that while they investigated the issue. So those are two examples as to why you want to keep track of your charges and expenses even though you think the bank isn't doing it for you, they're giving you a record like a ledger of what is happening. But ultimately, it's up to you to verify that those things that they're tracking or things that you did, not something that a bad actor did.

Also if you have different sinking funds and checking accounts and all that stuff as most people should, they're usually at different banks in many cases like if you have business banking. There are many reasons to have more than one bank account, and more than one bank. You got to have it all in one place.

Yeah. OK, a fun one, how do you recommend a polyamorous family manage and divide their finances? That is a fun question.

So I think that there's a couple of different ways you could go with. This you could go the split evenly depending just your denominator is the number of partners I suppose, and divide it that way. Another way that you could do it is by income.

And that's a kind of more controversial take. I think sometimes is like the larger earner pays a larger pro rata percentage of whatever the household expenses are. But I think with any relationship, whether it's monogamous or polyamorous or whatever it's just important to have open lines of communication about what your expectations are with regard to what expenses are happening and that they're kind of like ground rules set for those things.

And so yeah, I mean, depend on the number of partners I suppose, but either splitting it evenly or coming up with some kind of pro rata yeah, division would be a good way to do it. Do you have thoughts? I mean, listen, a couple of things off top, I do feel like in general in relationships, paperwork is very underrated.

Not enough people get prenups. Not enough people even have agreements for cohabitation, which I think are very important. And I think it only to me every new person that you add to a cluster, whether that's platonic or romantic is just going to make it more complicated.

Because I think it's the same thing as roommates in a sense, right? Because it's not just a question of, OK, all, let's say it's five people or four people. It's not just one relationship of four people.

It's like whatever four, it's like 16 relationships. You got all these different interdynamics, and then you got clusters and clusters. And you got there's just so many opportunities for not just like arguments and disagreements and potential separations but also just different values, different priorities.

Like you were talking earlier about how you could be saving for several things at once, but they're not all worth the same amount to you. It's hard enough to get two people to agree on what those things are. So I definitely think paperwork is the most important thing.

And I actually think that that's something that's also very underrated for roommate situations. And even just when it comes to like you were mentioning that it's controversial for the person who earns more to take on more of the responsibility. And that's actually a question we got quite a bit is some variation of is it the responsibility of the person who earns more to take on more of the financial [INAUDIBLE] burden.

Yeah, it's a great question. I think I would agree that paperwork is definitely underrated. And it's interesting that in business, can be super savvy and really adamant about certain paperwork and different agreements that maybe you come up with somebody that it seems like it's like a casual project or test or whatever.

And it's like, no I want to write this out because if something whatever may happen, good or bad down the line. I want to be able to point back to this document or these notes and say, hey, this is what we agreed to when we were kind of in a rational state of mind. Let's keep that in mind as we're going forward.

Everybody knows money is very emotional and very emotionally driven. And so I think it is important to be like, OK, let's sit down and rationally think through this. What do we as partners however many there want to do or say that we're going to do now and put that into writing so that you can refer back to it later.

In terms of being wait sorry, what was the second question? We were leading to something else. Well, just like is the person who earns more, is it their responsibility to shoulder more of the burden?

Yeah, I think that ultimately depends on your relationship and what you really deem to be valued. So money is just one form of currency. I think in a relationship, there are many other forms of currency in a relationship.

And somebody who takes on some more of the household burden or chores or things that they're doing can be contributing a significant amount of value to the relationship and your existence like as a couple or a polyamorous couple. But it may not necessarily translate directly into money being exchanged hands from you versus to a landlord or something like that. So I think ultimately, it comes down to your preferences and your values in the couple and what is important to you.

I would just off the cuff, think that if you're especially if you're living in a high cost area like New York City or LA that the person who is earning more should I mean, at least from a rent perspective, likely be contributing more as a higher percentage of the rent for that living area. Or if it's the person who is really adamant about where they live because it needs to be close to their work, then that's kind of the person that maybe should be shouldering a little bit more of the financial burden. It's kind of like who is making the sacrifices in which case?

And how much more might you be willing to pay for that sacrifice? Ultimately everything is about constraints and really balancing the kind of taking from one and paying for the other. And so just recognizing that everyone has financial constraints, and ultimately, you your money should be going to the things that are important to you.

And if living closer to work, living in a high cost area, having your partner live with you even though they maybe earn less than you do is important to you, then that's kind of a place where put your money where your mouth is kind of situation, maybe be willing to pay a higher percentage of those bills than others. I want to take it a step further here and say first of all, statistically, it is in a heterosexual couple far and away usually the man who earns more. And we know that there's a lot of reasons that go into that, especially as you start to have children.

Because women's labor is and time is increasingly devalued. Men's are increasingly valued. There's no 100% for me, and I'm not a CFP.

So take everything I say with a big grain of salt. But I do think there's an energy, a slight. To me, if you're in a relationship where you're living together, and one party earns way more than the other party, and you're doing 50/50, to me that's a big red flag about the person.

I think that's honestly not that far off from being I wouldn't go so far as to say financially abusive, but I think it's definitely taking advantage at minimum of a complicated power differential that isn't just about what, for example jobs they happen to be doing. It's also about, as you mentioned, there's also all of the domestic labor that's going into it. There's the time that's going into it.

There's the fact that we know that two people can be working the same job and be paid different amounts based on gender, based on race, age all of that kind of stuff. So I really think that it doesn't always have to be, I don't know if any of you guys have seen The Joy Luck Club, but I love that book and movie. And there's a couple in there where he earns way more, and they split everything 50/50, and that's just like one of many red flags that guy was throwing up.

But it really had-- I really do think that people don't take it seriously enough to think that the concept of fairness or the concept of equity can be a tool to reinforce an entrenched power for people who have more. Because if you're coming from two vastly different starting places, then the same amount is not equitable. Well, I agree 100%.

And I think that there's an interesting balance to be struck between splitting something 50/50 so that you feel like you're both contributing equally, I guess, to the partnership or to your household expenses versus like somebody paying if they earn so much more, pro rata would end up being like 90% like 90/10 split. There's a weird power dynamic at both ends of that. Because splitting it 50/50 as you said, if somebody makes so much more than on a dollar for dollar basis the person who earns less is actually getting the shorter end of the stick because they don't have as much left over as the person who earns more.

So then that may lead to resentment on the person who's earning less feeling like the person who's earning more should be contributing more. On the other side and getting into the heterosexual and inequality of like women's wages and things is that somebody who's earning so much more, generally the man, paying that large of a pro rata percentage of the household expenses, then all of a sudden has this sort of power dynamic of well, I pay for your lifestyle. And so I think there's probably some middle ground in between, and it has to come down to whatever couple or roommate situation, whatever that might be as to where you think that is equitable.

But as I mentioned before, there are very intangible non-monetary ways of contributing value to a relationship whether it's platonic or not. And that has to be considered in these arrangements. I mean, I'm a military spouse.

And so I have an interesting perspective on this, especially with regard to women's wages and employment for women. The unemployment rate for military spouses is over 25%. And it consistently stays that way because you move around so much.

We have very educated military spouses who are capable of earning significant amounts of money. But because you are moving so frequently and you kind of out of the workforce ultimately ends up becoming the Navy that pays for your lifestyle, or in my case, it's the Navy. And I'm grateful that I have a partner who is completely supportive of the fact that I'm building a business.

I'm doing other things to contribute value not just today to the household, but to our future, to our kids future, all of that. And so that's a give and take a balance that we're striking now is like well yes, he earns the money, kind of pays for that lifestyle. But over time, as he gets out of the Navy in a couple of years, that's going to flip.

And so I think that's another piece of this equation to keep in mind is that whatever agreement you strike today does not necessarily have to persist forever and that as things change it's from a financial planners perspective, it's something you should be reevaluating on an annual basis. And you should constantly check in at least annually with OK, this is what worked for us this past year. Has anything changed?

That's the first question a CFU would ask you when you come in to check in with them. And if it has, how then might that change the way that you're dividing expenses or the way that you're going forward to achieve goals that you've set for yourself and for a partnership. Love it.

How can a two partners with very different financial situations and upbringings navigate things both financially and emotionally? Are these-- do we know if these are platonic, or? These are, I think, romantic partners, husband and wife, girlfriends, boyfriends, whatever.

Very different values, very different upbringings, very different pay structures as well. Probably, sure. So just different across the board.

Yeah, and especially I would be especially curious to hear about navigating coming from different backgrounds, especially. Because I think that's a very frequent question that we get, and one that I really want to hear a CFP's take on. Yeah, I think that the backgrounds piece is really interesting because having come from a low income background myself, I know that just in many ways, I feel like I don't relate to people or that there isn't a common ground necessarily sometimes when we're approaching different financial situations, whether it's the type of trip we may go on or splitting a bill in some case or something like that.

And it's just don't. And it's neither good nor bad. But you just don't quite understand where the other person is coming from at a very visceral level.

And so I think that in many cases, this is often not talked about but therapy or some type of joint counseling with regard to money can be a really helpful thing to do in that scenario where it allows you in a safe space to talk about how you feel about money, your upbringing with money and how that has shaped or framed the way that you view money today and into the future just so that you can kind of clear the air in a non-judgmental space and really try to understand your partner better. Because ultimately, I think that's what really matters most is that you just is like this empathy piece. You may not have walked in their shoes, but at least you can understand where they're coming from and approach whatever situation that might get hairy with money from a place of like love and acceptance rather than just butting heads because you don't understand each other.

So there are a lot of financial planners that actually recommend people go to counseling to talk about money either before or after they engage with a financial planner. That way, people are just kind of like on the same page at least understanding why something may be important or triggering to someone when it may not be to them. I think in addition to that, it's really this is really where the line for me as a financial planner comes as to whether you should have joint finances or not.

Because if your values are vastly different in how you want to spend your money or what you prioritize with your financial goals are really not aligned with each other, that's OK. We're each our own individuals. That's totally fine.

But that may create a recipe for disaster if you decide to share your finances because the way that somebody that maybe grew up in a wealthier family or a family that at least wasn't worried about putting food on the table that may like to go spend money or may want to upgrade to a further in front of the plane or something and spend the extra money to do that. Whereas the person who maybe grew up with no money was worried about where their next meal was going to come from, all of that may be like, no we can't do that. In some cases, maybe it's better for you to spend out of different accounts that are kind of like solely for you whether it's for fun money or for the things that you just want to pay for outside of the joint household expenses.

I think in my case, my husband and I share like all of our finances are joint. But we're incredibly aligned on everything that we want to get out of life financially. And so it makes sense that even though our earnings have changed and who's earning more has changed over time that ultimately we're both together still pushing forward to the same end.

Then it works in our case. We don't fight about money ever. And I think we have a really healthy joint relationship with money because of that.

But I think if everything's vastly different, then there's absolutely no shame and having joint or having separate finances, and just figuring out we talked about earlier what the division is for the things that are sort of joint by default, where you live and how much you spend on groceries and things like that. Yeah, I would agree with all of that. I feel like the emotional piece is often so underrated.

And I think a lot of it depends on how your in-laws are or your partner's family is. Because I do feel like it's one thing if you guys have a good relationship around these things. And it's another if the other members of the family are maybe not very compassionate in the way they talk about money, or they can be very judgmental, or they can have a lot of assumptions.

And I do feel like one of the things that's very important is that if your partner-- ultimately you and your partner can't control where you come from, right? You can't control what your backgrounds are if one of you comes to the relationship with a way more privileged background financially. And I've been in those situations.

You can't fault them for it. You either choose to be with them or you don't. But one of the things that then that partner has to do is a, obviously on their own, be a lot more savvy and empathetic and understanding when it comes to their own privilege and never kind of shaming or ostracizing you or assuming that their way of doing things is better because they come from more privilege.

But I also think they have to be and this is where I think a lot of people kind of falter is they have to also be very-- they have to be on your team when it comes to their own families. Because I do feel like we'll hear a lot, and we have some questions in this kind of space, but for example, when it comes to family functions, when it comes to weddings, when it comes to bringing children in the mix. Then there are all these expectations about the kind of place that you live, the kind of gifts that you give, what you're expected to be able to afford when it comes to travel, when it comes to all of the things that people have their own idea of normal for.

And if your in-laws are pressuring you to a certain lifestyle or a certain decision, and if your partner is not standing up and being like no, that's not OK with us, or this isn't realistic for us, then I think that's where we get into super red flag territory. I 100% agree with that. And I am married to an Italian who's an only child from Jersey.

So I have-- I love my in-laws if you're watching this. This is great, but there have been moments where we've talked about money where it's either like where are we going to live? Where are they going to live as they age and retire?

Because he's an only child, and there's some expectations of like what that's going to involve and how close they could be to their grandkids and what financially we may contribute to try to make that happen. And those are things that you have to talk about. But I do 100% agree that it is so important that your partner is on your side.

Because ultimately, it's not like them being on your side. It's being on the partnership's side, right? And so it isn't-- we've had these conversations like John, my husband is not taking my side.

John is standing up for what he wants, which is what our joint unit wants. And sometimes, that's causes some friction with what in-laws or other family members may want as well. I think what's really important to understand from the financial planning perspective is that ultimately, you as an individual and then as a couple are sort of a microcosm in your own bubble of what you are trying to achieve.

Maybe there is some money that flows or exchanges hands like between family, or there's maybe like an inheritance on one side but definitely not on another, et cetera. But ultimately, you're running your own race. And I try to really impress that upon people is that I think there's so much emphasis put on what other people are doing through social media or how other people manage money, et cetera.

But really what it comes down to is when you walk into your home, whatever that is at the end of the day, it is you and it is in that partnership. And you have to be the ones that are happy, fulfilled, et cetera with the decisions that you're making in your financial life. And so standing up for those things to me is just an act of existence and advocating for yourself.

My husband takes the partnership side as well. But let's be clear that that's my side. I'm the CEO.

Oh this is just a funny one. I'm sure there's no real answer here, but how do how are people affording these weddings? Are they taking out personal loans?

Or what's going on here? That is a great question and real serious question. So give some background, we were the first in our friends group to get married.

We were 25. We had been together since we were 18. So for us, that was a long time.

I had just left Wall Street. He left Wall Street to join the Navy. So I was actually the higher earner at that point.

And we, I come from a low income background and so does he. So there was no expectation of parents or family contributing to the wedding. In some cases, there was we would really like to pay for the cake for example.

So they were like whatever they could afford and contribute, they did. But otherwise, it was all on us. And I think all told, I don't know if I've ever told anybody this, but our wedding costs like $35,000 to $40,000 total.

Ooh! Damn, girl. Yeah, which like compared to other weddings that we've gone to though, that is probably one of the cheapest weddings that I've ever been to.

You've probably been to a lot of weddings in New Jersey, so. Yeah, New Jersey we were just at one in another country, all these things. And so I think that in some cases, there's a lot of families that are contributing.

I think that at least in the kind of our circle at least, there are a lot of very high earners in our circle. And so whether they're paying for it out of cash or what, I'm not sure. But I do unfortunately think that a lot of people go into debt to pay for their wedding.

And it's generally credit card debt. Because they aren't financially savvy enough to know that something like a lower cost personal loan may be a better way to pay for something like that than a high cost interest rate credit card. But yeah, I think a lot of people go into credit card debt or debt in general to pay for these weddings, which is just one day of one year of a year in a life.

I know it's an important day, don't get me wrong. But it's kind of crazy to think about. And having cash flowed and paid for our wedding using the very strict budgeting method, I'm really proud of the fact that we didn't take on any debt to do that.

And we saved up for it, and we're really like savvy with how we were affording it. I think that just brings up a larger question, which is that you never know somebody's real financial situation. You can only make assumptions based on what you see.

And I think a lot of times having seen a lot of people's like under the cover of personal finances because as a CFP, you kind of have to share your bank statements and your credit statements and all that stuff. That mirage that a lot of people like to create is a lot of times just the best possible picture they could paint. When in reality, once they step into their home, it's like an absolute nightmare of financial worry and concern.

So you never know. I mean, if they come from means, then it's maybe paid for. Maybe there was a fund for it that was set for them when they were much younger.

But if they don't come from means, then it's really extravagant. Then it's quite likely that they're putting it on credit cards or other forms of debt. Please do not put weddings.

Please don't. Credit cards, or I'm sorry, I know they're savvier and by the way not savvy enough to know that the personal loans are better drag them. But also, even if you get better terms on a personal loan, don't take out a personal loan to pay for a wedding.

Maybe this is controversial, but there's no party in your goddamn life that is worth putting yourself into debt for. I really feel that way. I agree.

I just I think people, and we've talked about this on the channel before, but the wedding industrial complex is very real. And as an industry, we have seen the extent to which the wedding industry and everything that goes with it, and we're having bridal showers. We're doing bachelorette trips.

We got the gender reveals. We got the showers, we got the sprinkles. We got, this didn't always exist, and certainly not in this way.

These things have blown way out of proportion because a, through social media and other levels of visibility. We're now able to normalize a much higher level of what is expected for these kind of things and see into. We don't just see the weddings that we attend, we see the weddings of everyone we've ever known, including celebrities, including influencers, including people who have nothing to do with our lives or budgets.

But also, these industries are savvy, and they realize that as this starts to creep up in our cultural conversation, everything is an opportunity to monetize. And it goes from being this sort of new exciting very extravagant add on to something that everyone is expected to have. It didn't used to be like that.

And I really do think that it's people often, I think, really delude themselves with the whole spend on experience is not things. That's true to an extent, but you shouldn't be going into debt for experiences, either. And also, it's one day, girl. , It's one day and then it's over.

I agree, and I've experienced the exact same thing of our wedding being the first. And I think looking if I were to look at all the weddings we've been to since, I would say that hours. It was probably on the much lower end side of how much-- It's $40,000.

I know, hey back, yeah, and this is 2014. I'm very proud of that. And you should have heard some of the people that we contracted with being like you must come from a place of where you've done negotiating or something before.

Because we've never done for this amount of money before. And I was like, that's right, that is right. But yeah, I agree.

I think that there's this interest, I mean, there's a dynamic that's happening, which is that as people start to get married later, generally, they are earning a little bit more. Maybe they have more saved up. And so it's not crazy to think that they are they're means to afford a more elaborate wedding are higher, right?

But that has absolutely no bearing on how much they're asking you as a guest to do. And this comes back to my kind of mantra of run your own race. You should really be focused on what it is that you're trying to achieve and not place any judgments on anyone else.

And I wish that it was more acceptable to just be like, hey I'm sorry. That's not in my budget right now. I think there's a better way to frame it than it's not in my budget because that feels a little bit restrictive like oh, my money's in jail, and I don't let it come out to play very often.

But I think it's more of like that's not aligned with my current financial goals is one, or unfortunately, or that would negatively impact my ability to achieve these other things I'm working toward. You should never feel pressured to go to someone's wedding where if you're a couple, you're having to spend a few thousand dollars or something just to get there and stay in food and whatever if that few dollars could be better spent on the house you want to buy, which is like for you as an individual and a couple more important, longer lasting, has much more to do with your ability to live than this one weekend in, I don't know, Europe or whatever for somebody's Italian wedding. I don't know, I think that we all as a society need to be just so much more open about claiming what is important to us and just being frank and honest about it.

And ultimately kind of not not caring what other people think doing it in a tactful way if you can, but I think as, at least, I tried to be this way of somebody said they couldn't come, I didn't press as to why. Trust that other people are doing what's in their best interest. And try not to place your judgments on them about whether you think they should be there.

And they should be willing to foot that bill or whatever. You have no idea what's going on with other people's financial lives. And if they say it's not in their budget or not align with their goals, don't ask me other questions, I guess.

I would agree with that. Also, I'm getting to another question. But I just have to give this one last thing.

I'm done with these registries. Listen. Oh God, the registry was a nightmare for our wedding.

I am what-- you guys were 25. You were more legitimately starting out your life. I'm going to these 35-year-old weddings who live in a nice house apartment who I know can afford to go to a Williams-Sonoma and get their own knife set.

And I'm like, how impersonal is this that I'm just like going to some random website and be like, OK what dish towel set is left that I can. You're not even going to know who sent this. Let me just give you-- let me just give you some money?

Why do I even have to go through this rigmarole? Yeah, I think that I definitely agree there, too. I think there's another interesting dynamic with the registries that's happening, which is when I first got married, we had literally just moved in together.

And so we did need a lot of things. We needed like a pots and pans set. We needed a knife block.

There were things that we needed to sort of establish our life together I guess. We can dive into the nightmare that was our registry and issues with in-laws for example of them doing something that I was not OK with. But I think that, yeah, juicy, salacious.

Anyway, I think that now what's happening is that as you get from let's say a marriage at 25 or a wedding at 25 to now in the mid 30s is that the things that maybe they bought for themselves when they first established their place or maybe getting worn out. So maybe there are some things that need to get replaced. But that shouldn't necessarily be your burden as a guest to be the one to do it.

I always try my thing is that there's lots of questions about oh, how much do you think this might be-- are per plate as a guest and trying to figure out how much cash to put it in an envelope for that. And that's like the Italian side of my family, which I've never understood. I don't get that the whole cash for weddings thing.

How do you know how much to give if it's not like based on your affordability? But you're trying to guess how much your plate costs. That's a whole, I hate that.

I hate that so much. So what I try to do instead is I think of the couple. And I think of, well, how much am I spending to go here, right?

How much all in am I willing to spend on this wedding? OK, how much does travel cost? What amount of that amount we've budgeted for weddings this year is left?

And what cool, creative very custom thing could I do with that money that would be really meaningful for the couple? So there are examples I've done is I've gotten travel blankets embroidered with their the monogram they created for their wedding for example. And that was their gift.

Because I knew they were going. And it was like $50. But it wasn't expensive.

But I knew they were going on a big long trip for their honeymoon and that having a nice travel blanket was going to be, and it had a pouch in the front to keep snacks and stuff. I know, right, was going to be really nice, and they loved them. Or there's another one where we had the place that they got married, they were these bathymetric really cool custom things on Etsy that you can get made of like a location and the depths of the water and things they got married in the lake.

And so proportionally, that wasn't that expensive of a gift, but it's super meaningful to the couple because it's like their favorite place ever. So that's how I like to go about gifts whether it's for weddings or Christmas or anything else. And ultimately, it's your budget.

What can you afford to spend on this gift? And how can you maybe make it more personalized than a cutting board and a spatula? The word meaningful, truly lost in this experience.

I don't need to be buying you an 1/8 of a couch. I can just send you-- That's weird. Send you a check.

OK, so we've got a couple versions of this question. So to synthesize basically, I come from either a low income or first generation background, perhaps both where essentially, the parents are very resistant to the concept of investing, very either don't have anything for retirement, or have very little for retirement. And then now adult children are basically trying to navigate this in a way that won't offend them.

Ooh, you're preaching to the choir here. So I am-- I was a first gen low income student at college. I met my husband there.

He was also a low income student as well. And he's an only child. And now that as his parents are aging, there are lots of questions and conversations about how we are going to navigate them as they age and how they're going to continue to be a part of our life.

We're in California. They're on the East Coast. They are getting closer to retirement.

They have not invested much into 401(k)s one case or anything. So their largest asset is their house as we are in this very inflationary environment with interest rates going up significantly. Housing prices were on an incredible tear, but now they're going to have to start coming down as the Fed is essentially trying to force affordability by kind of personally kind of screwing over some of the people who own houses by sort of making houses less affordable by increasing interest rates.

And so that's a conversation we had recently was like, hey, this is before the Fed raised rates this summer or late spring, summer, and we were like you guys financially should probably consider selling your house a couple of years earlier than you were intending to and start thinking about retiring maybe earlier. Because you're going to get the most for this asset than you probably ever get for the next potential cycle of 10 years. We don't know, and incredibly resistant.

They're like, no. You told us we don't have to do this until John is getting out of the Navy and/or you are pregnant. And I was like, ooh, please don't make your financial plans based on my womb.

I really don't want that happening. Oh God. Yeah, but so that was a really interesting conversation where we tried to find a suitable alternative, which was like hey, there's this place in California we love to go to that weirdly buying a second house would be significantly cheaper than buying a primary home in San Diego.

So we could continue renting there but actually afford like a small cabin or something in this lake town. And we're like, what if we bought that, and we split the mortgage? So it's like you guys are paying rent that's at an affordable rate for yourselves.

You have this cash that you can then invest and live off of because you sell your house in New Jersey. And then you're closer to us, and it seems like it would be whatever. But it was like, no, they're not into that.

They're not ready for that, all of this. And I think that again, this kind of unfortunately kind of comes down to the run your own race thing again. There is this pending potential looming burden that aging parents may have on our generation, especially if they have not invested or saved enough to support themselves in retirement.

And it's scary. I literally, this is my life. I worry about this.

I don't worry as much as on my family's side even though I know the situation is sort of similar. But just there's a different support network where my family is from then and the cost of living is significantly cheaper in rural Michigan than it is in a nice area of New Jersey. I think that all that you can do is as the children, voice your concerns.

Try to have open conversations with your parents about what their plans are so try to focus it on what they would like to do. And then help them figure out if what they have is sufficient to make that happen or not. Because ultimately, you're going after your goals, but they may have goals, too that perhaps they haven't shared with you.

Money is something that's taboo to talk about I think in a lot of families. And there may be things that they're hoping to do, leave you something or contribute to a kid's college fund in the future when you have one or whatever that might be. And where that tension comes from is when the lines of communication are not open.

And so the best things that I think you can do is just have these open and frank conversations. Express your concerns as children about it. Have them share with you what their hopes and dreams are.

And then figure out if there's some way to work together maybe to make that happen. I think unfortunately in a lot like certain cases, if you're really that close to retirement, and we're in a certain investing environment that we're in right now and potentially heading into even further of a downturn, I don't have a magic ball, that trying to be like, oh, let's just throw a ton of money into the market right now and hope to make up the time that we did not invest the last few decades is not probably not the answer. So it's really kind of looking at their financial life today and saying, OK, what do you want at minimum?

And how can what you have right now make that happen? What changes might you have to make in your life to actually afford that or bring it to life and then really just helping them get comfortable with the changes they may have to make. I think that is the transition from working into retirement is a really difficult transition for a lot of people who are blue collar folks that have just worked their entire life and can't imagine never not working or maybe feel like they haven't earned it.

And so those are really tricky things to navigate. And again, I'll bring it up. I think going to a joint counseling or therapy session with those people can never be a bad idea, just having kind of like a neutral third party in the room to help you iron out those things and to allow that person to voice their wants and desires and concerns and other party to do so and then try to come up with some resolution.

Yeah, I mean, I definitely this resonates a lot obscuring the parties but like I do what I do. I've been doing what I do for eight years. I still have many people in my life who don't believe investing.

I mean they believe it's real. I think but they just like believe it's a scam or that it's like not a good idea for building wealth or who won't look into it all that kind of stuff. And I do think I mean, a lot of it is generational.

A lot of it's cultural. A lot of it is the background that you had the personal experience that perhaps your family had growing up, whatever it is. But at a certain point, as you said, you are not-- all you stand to do what I think a certain point if you try to drill down too hard on it is alienate that relationship.

I don't think you're going to browbeat someone 30 years your senior into completely changing their financial strategy. But the real, I think, question mark for a lot of people, and this takes me into a question that we got is basically what happens when you have essentially insolvent parents who maybe have maybe they have a house, maybe they have a little bit of cash in savings. But they're definitely not able to have a comfortable retirement.

And so this person says my husband wants to have his parents come live with us soon because they're just not really able to afford to live on their own. For me, this goes completely against the goals that we have for ourselves. And I would rather they keep working if physically capable.

What should we do? Yeah, I resonate with that question, too. I think again, it's really having a conversation with that party about what might they expect from you.

Because I think that sometimes we place these burdens on ourselves in terms of what the other party may need from us. And I'm guilty of this 100% especially with these familial relationships of just sort of assuming well, if my perception of that situation is not so great as and maybe that's coming from I'm just overanalyzing all the time about this stuff but not so great or I'm at least somewhat concerned about it. They may be completely fine.

Your idea of insolvency as an individual may be very different from theirs. You may, especially if you live in a higher cost area than you do, you may look at their financial situation and be like, how could they possibly afford to retire. Well actually, their goals in retirement may be significantly less than you think or cost less than you think.

So perhaps like your vision of retirement is oh, you go on a trip every a couple months or something. Or you go on a few trips a year, and you visit your grandkids all the time and you're golfing. And I don't know, play shuffleboard, or whatever it is that you might be doing.

When in reality all they want to do is just spend time together in their house, which doesn't cost a thing really except for the roof over their head. I mean, that's like a real conversation we've had with family members is my sort of assumption was that while you want to live closer to us, that's going to be more expensive. You're going to want to probably come on trips with us and the kids once we have them.

You're going to want to actually enjoy life and pick up hobbies that you've never had time to do and everything. And it's like, no actually that's not what we want. For at least for the first few years, we just want to enjoy just spending time together because we've both been working so much that we've been like two ships passing in the night, and we just want to spend quality time together even if that's just on the couch in our house.

And so that doesn't-- I know it's cute, right? That doesn't cost much. And so your perception of them being insolvent may not quite be right.

It really comes down to the numbers, I think. Go ahead. But I was going to say for argument's sake, let's say there is a partner in a marriage where their parents are not able to make ends meet in retirement.

They theoretically maybe could work. But the child of this couple is like, I don't want them to have to work, which is a very understandable impulse. And I want them to live with us.

But the other partner's like, what the hell? We were saving up for x or y. We wanted to maybe get a down payment, or we wanted to have kids.

We want to do other things that this is going to put a real wrench into if we're having to support, , if in this capacity we're having to support your parents what? And it's horrible to say like who wins in that sense, but it's one of those situations where someone at least in the majority sense has to kind of get their way a bit, you know? Yeah, I can appreciate that.

I think that especially like in our case, the goal for us is to potentially be able to afford like a place that has a Granny flat or some kind of like second space where my in-laws could move into and that would maybe ease their transition into retirement and get them close to our kids. We have in-house daycare, a whole bunch of other benefits there, too. I think that there are a couple of ways from a financial planning perspective that you might try to get-- might try to make that situation a little less risky.

And so the first thing that comes to mind for me is well, what are the parents' health situations look like? Because if they're one of the biggest expenses that people have in retirement and as they start to age becomes their medical expenses. Even if they're on something like Medicare or Medicaid, it can start to really balloon out of control depending on the issues that they start to take on.

And so one of the things as a financial planner, you always start to recommend is if they don't have long term care insurance already, and they are predisposed or there's family history of anything like dementia or Alzheimer's or anything that would require significant support, whether it's like them living in an assisted living facility or receiving like in-home care or something, then long term care insurance should be something that is looked into for sure. Because that can really at least allow you to have a sigh of relief that if anything big medical comes into play where they really cannot physically live on their own like they need help with that, then something like a long term care insurance policy LTCI would be able to support that individual. So that is a big thing that I just advocate for in general if there's any family history of anyone ever needing kind of care as they age.

I think outside of that, it's difficult. I mean, this is a situation a lot of us are in. You as a partner don't want to not support your partner.

But we were talking about earlier that in some cases, you need to advocate for the unit not necessarily for the entire familial kind of generation and group. I think the question is really how far is there a compromise that you could come to where it's like how far, how much of a setback might it be for you to support them or for them to come live with you? Are there, we talked about earlier, intangible pieces of value that actually having them nearby or living with you may provide to you as a couple that actually makes it more affordable to do certain things.

So thinking of somebody living in their home and they have children, you don't necessarily have to look for daycare necessarily if your parents are capable of taking care of your children. You may be able to travel more often if you have in-home care. There's lots of different ways of taking that, which may feel scary and negative and thinking about how actually might this make things better or easier for us?

I don't know. It's a really-- I don't have all the answers. I'll be the first one to admit that.

But I think trying to figure out are there insurance policies that can help with some of this? Are there ways of looking at their situation through their lens and eyes rather than applying whatever perspective or opinion I have about their situation to their situation? And again really just having those open lines of communication, I think that sometimes you think what people want, and you have no idea until you ask them.

That's so true. We just bought a home, and we're already overleveraged. How do we best ride out the next few years?

And could you just quickly explain what overleverage means in this context? Yeah, I was kind of making a slight face because I was like there's a lot of people that are already finding themselves in that situation, are going to be finding themselves in that situation. Overleveraged essentially means that you have taken on more debt than you can afford or a higher amount of debt than your debt to income ratio would generally recommend.

In layman's terms, it's you feel stretched very thin financially just to make your minimum payments on your mortgage and some other things. And so what I've seen happen in the last few years has been this very exuberant rush to become a homeowner and to pay whatever price is necessary to do so. And for a long time, the Fed kept interest rates very low so that affordability was higher.

And I think a lot of people don't quite understand why that is. When rates are low, why can you afford more of a home versus as rates go up why can you afford less of a home? It's because the banks make a lot of money off of interest.

And so the largest portion of your mortgage payment starting out is interest. So if the interest rate is higher, it means it's taking up a larger portion of your payment of the amount you can afford to pay each month, which means less is going to principal. And if less is going to principal, then you can afford a smaller house or a lower priced house than you would have been able to when rates were a couple percentages, which is crazy to say, a couple of percentages lower earlier this year.

I worry that is happening a lot more than people are talking about. I think that I don't want to be like a predictor of any sort or try to doomsday, the sky is falling anything. But I think when Warren Buffett is somebody that I've always looked up to and the investing space, personal finance space.

And one of the things he says is to be greedy when others are fearful and fearful when others are greedy. And I think that we saw a lot of greed happening in the last couple of years, especially in the housing market. And that ultimately unfortunately that's going to start negatively affecting a lot of folks. whether they're going to go underwater on their mortgages because they paid a certain price for an asset that seemed reasonable or maybe a slight stretch at the time, but as interest rates go up and affordability goes down, if they were to try to sell that asset today, they would lose money on that asset.

I think that's just inevitably going to start happening. That's just how the dynamics and the economics start to work. What to do about it is there are a few things.

So really look at your cash flow. That's the first thing. That's the thing that you have control over.

So if you're locked into a 30 year mortgage. And if selling would mean that you lose a lot of money today, and you want to stay in your home, then you need to look at the rest of your spending and be like, are there other areas that we can cut that are lower priority. And again it's all a give and take.

So we have constraints. You only earn a certain amount of money every month, right? And if one of your number one priorities are very high priorities is to stay in the home that you bought that now makes you feel overleveraged, then you need to figure out where you're going to take from other places in order to continue fueling that goal, which is what it is, right?

Home ownership, I think, extended home ownership is a goal. So that's number one. Look at any other debts that you have to see if you may be able to reduce your rate or do some kind of financial engineering where you get a lower rate on that thing.

So if you have credit card debt for example, there may be ways of pushing that on to a personal loan or even on to a zero rate interest card but then with a very strict payment plan. But ultimately, if it's a house, those are really big illiquid heavy assets to unload. You can't just get rid of that like you can some other things.

And so I think that if you are feeling that overleveraged, then you may need to have a real conversation with yourself, which is is this really my goal? Was that a smart financial decision I made, or did I make a decision perhaps that was emotional in the time because it felt like I had to or I was pressured because rates were going up, and I had to afford this. Or there were 20 offers on this place.

And so I had to put more down or do whatever it was that I was going to do. And sometimes, it's OK to say that I made a mistake, or I need a reset or whatever it might be. So if you're really in a position where it's like it's feeling super crunched, and you're starting to get very concerned about your financial health, and your financial life going forward, it's OK to assess whether that home or whatever it was that you bought is still in your best interest.

Because it may not be. I think a lot of people hang on to houses and things for longer than they should when sometimes the best thing they could do is sort of like cut their losses now and look at alternative places to live for example. It's not the thing you want to do.

It's probably going to hit your ego in a way that you're not happy about. But ultimately, you have to keep your financial house in order and make sure that the foundation of that is very strong really going into these house analogies. But that's really it.

So if you are in a place where you cannot cut from other places to feel a little relief, then you might need to look at the thing that's causing you the most pain and ask yourself whether it still serves you. Well said, and I will say, this is why we're always going on about how it is not always the best decision to buy a home. I don't own a home on purpose right now.

There we go. Yeah, I love renting my home, love it. If people were overleveraged, and they rented, they could move.

This they would not be in this situation. That's exactly it. I think people, I could go on and on about the American dream and how that's really transformed over time and what that even means.

But I think that this is the social media piece where it's like you're supposed to have that first. I'm a homeowner now. Put a picture on Instagram.

And no you don't. You don't need that. If that doesn't serve you, that's totally fine.

I love the fact that I have control over where I live. If I want to move at the drop of a hat, I can do so. And I do.

My net worth is not impacted by this massive 15 to 30 year debt that I've taken on, which in some cases totally fine. Again, it's all about your personal financial priorities. But if someone were to come to me as a CFP and be like, present all these things.

And I look in their mortgage payment is like over 40% of their take home pay. I'm going to be, and they have other debts maybe in other priorities, the things that they want to achieve, I'm going to question them very heavily as to whether that is an asset that is serving them or not. And really try to get to the root of why they bought it in the first place and if there's another way to feel the same way or to accomplish the goal in a similar way that is more affordable.

OK, last one for a little quick hit, and this is my heart goes out. But I've been hiding credit card debt for my husband, and it's getting out of control. What do I do?

Oof. Just a light, breezy question. Yeah.

And oh boy. First of all, know that it's going to be OK regardless of whatever it is. If you're afraid of bringing this up in a relationship, I think that's a different red flag perhaps than just the credit card debt that you may be in.

I think that financial-- I think that there is this idea of financial infidelity or financial abuse in some cases. And sometimes having something like hidden credit card debt can be kind of considered that because you as a partnership, especially if you share finances, that is something that is affecting that other person without them knowing. And I think that's really unfair for that other person.

And it's not something that you want them to discover later when you go to apply for a mortgage, or you go to try to get some other type of financial instrument. And then it comes up. I think that the best policy is always open, honest policy and communication.

Bring it up, be like, hey, I have something to talk to you about. It's going to be unpleasant, right? Set the stage, set the expectation.

But don't just come to it with I have this problem. Make sure that you're going to that person with and here's how I want to solve it together. Because just kind of like offloading something like that onto a partner when you've not been honest about it whether it's money or anything else, I think is just kind of a recipe for disaster.

Own up to what you've done. Talk about why you did that. There may be therapy or counseling that needs to happen to make sure that doesn't happen again.

And then try to create a plan forward where whether you're working on your own or together to come up with a resolution solution. You have to do that. I think that there are certain pieces of us as individuals that we need to work on alone.

And there are other pieces of us where we actually need help and assistance to do that. And so figuring out which one of those it, is I think that there can be there's a lot of addictive tendencies in spending. And so it may be something that you may need external help for.

You'll have to, I don't know your situation, so you'll have to assess that yourself. But just be honest about it. It's not something that you want to continue hiding.

No, and I have to say this is like a strategy that I pursue in my own life. There's a real possibly in my own life a couple that's gotten divorced over this. It's real.

Your partner may say this is a massive betrayal. This is not who, I, love you but I don't want to be your life partner depending on the scale of it. In this case, that I'm familiar with, it was a pretty serious level.

So I definitely would understand that from just a purely I'm never going to own a home. I'm never all that kind of stuff. So there's that.

But I do think it's important when you're going into any very high stakes situation like that to, because obviously this person is very anxious, what is fear worst fear? Create a plan for yourself based on that worst fear. For me, any time I go into something where there's a potentially very bad outcome that really upsets me, I create a very specific plan around the worst outcome.

So that if that happens, I feel like at least I'm not just floating through space. And obviously you would hope that your partner is understanding and willing to work with you. But I also think people do need to remember.

I think not enough people treat marriage as first and foremost it is a legal partnership. You have formed a legal unit. And you are in the eyes of the law, above, all like a financial organization essentially.

You guys are tied up to each other in that way. And that is one of the big tenants of a long term partnership is that you guys are compatible that you can trust each other in that way that you share goals, that you share strategies and all of that stuff. And so I do think it's fair for someone to say based on certain financial like if someone were completely spending their partner out of the ability to have a future, it would be totally within that partner's right to say I'm out.

So I would say base a plan on that, but. I agree with that. I think that heading into any scenario where you've thought of what the worst case outcome is and just prepared yourself for whatever that might be because ultimately all that you can control is your reaction to something.

You can't control how the other person feels about something. And so creating a plan that is perhaps self sufficient if it needs to be depending on your partner's reaction to this is really important. I think that also just recognizing when and how to ask for help if you need it.

I think that there are so many support organizations for when we go overboard with alcohol or drugs or other vises in life. And there are not enough of those when it comes to money. And if this has been your outlet, if spending or doing things that are kind of outside of the realm of what you and your partner had initially talked about or hiding those things from them is whatever emotion you're channeling into that may need to be tapped into more.

That's probably the healthy thing to figure out how to make sure that you come out of that in a healthy way. But I agree. I think that from the partner's perspective, it's like, well, if you've been hiding this for me, what else might you hide?

And that's a really big question. And really kind of coming full circle on this, if you have goals that you've all established together, and one of those parties is doing something that is not in line with those goals, whether it's financial, whether it's with their job or I mean, there's lots of different things that you could do to jeopardize your joint goals. It's something that has to be addressed and either course corrected or perhaps realize that maybe this union is not going to work anymore.

Yeah, but again, honesty is the best policy and prepare for the worst case sadly. This is a bad place to end. You know what?

Listen, at the end of the day, we're all going to meet the worst case of all, which is that we're all going to die. So and that's why we need a will for example. You know, you've got to plan for that worst case scenario.

But no, I think your advice has been super sound, very reassuring even the delivery. For me, I'm like, I can see you being across the table from your clients like it's going to be OK. I'm a very rational actor.

Yes. I am always on the side of rationality and reason and just what always whatever is in the best interest of the person I'm trying to help. So however I can do that, I'm here for you.

Well, speaking of reason, where can people go to download your fabulous app? Oh, thank you. The easiest place is in the App Store.

You can type in Reason Invest, and it'll pop up there. It's a little teal icon with an R. Or you can go to and check out a little more information there.

But if you're really interested, just want to get to the app now, go to the App Store and look for a Reason Invest. Love it. Well, thank you so much, Tara Falcone, CFP CFA.

Wow, how fancy. I thank you all for tuning in, and we will see you next Monday on an all new episode of the financial confessions. Goodbye.