What to do after ‘I do?’ As you begin your new life together, here are 5 financial tips you will want to consider, according to Forbes.com. As you work your way through these tips, keep in mind the most important rule is being open and honest about your finances.
Set financial goals
It is recommended that you set three different goals for your financial future:
- An Emergency Fund
- Short-Term Goals (i.e. saving for a new home, car, or a vacation)
- Long-Term Goals (i.e. retirement savings or education savings).
Discuss where you each want to be in the future financially and ways to get there. Also consider your current financial habits. Who is a spender and who is a saver? It’s ok to be different, but it will help to be aware of those differences.
Reveal your net worth as a couple
There are three easy steps in calculating your net worth:
- List out all your assets (i.e. savings accounts, checking accounts, and real estate)
- List all debts (i.e. credit cards, loans, and mortgages)
- Then take your assets minus the debts and that is your net worth.
If you haven’t already, you should also reveal each other’s income. As long as you are being open and there are no judgements for each other’s credit history, it will be a relief getting it all out in the open.
Create a budget
- Create your budgeting plan - If you aren’t sure what your expenses for the month include, be sure to track it for a month first. A good tip is to estimate high on expenses and low on income.
- Aim to save 20% of your monthly income - 10% going to an emergency fund and 10% to retirement. If 20% is unrealistic, save the percentage that you can right now and then work towards cutting expenses down.
Sometimes couples find it’s easier to determine one bill payer but keep the other in the loop as to what is being spent.
Decide on how your accounts are set up
Are your accounts going to be separate, joint, or a combination of the two? If you are going to have separate accounts, you will want to update beneficiaries. Also, you will want to add your spouse to your will, trust and life insurance.
Minimum cost for discussion
Any easy way to avoid future fights on money is to set a minimum spend that will need discussion. If you are purchasing something small like a $20 item, no need for discussion. Although, if the minimum is anything over $1000, then you know ahead of time you and your spouse will have t to discuss purchasing these larger items. You both should decide how to deal with friends or family in need, and deciding when to give and when to withhold.
Full article: http://www.forbes.com/pictures/fjfi45ille/13-financial-tips-for-newlyweds-3/
