If you are beginning a new chapter in your life with a spouse or partner, jointly managing your money may be the last thing on your minds. But it should be one of the first things you both consider as you begin to direct your separate finances into a financial plan for the future.
Depending on your ages, here are two lists of financial areas that need attention as you begin to plan your life together. I would advise focusing on the A-List first and then, tackling the B-List.
- Creating a household budget
- Bank accounts
- Housing Optionsnalysis
- Saving for retirement or other goals
- Insurance needs analysis
- Debt management
- Educational funding analysis
- Income tax planning
- Long term planning (20-year spreadsheet)
- Estate planning
- Long-term care insurance
- Real estate investments
- Social Security
A significant, initial financial consideration will likely be determining where you are going to live. What with today’s low interest rates, buying a house may sound like the best option, yet careful consideration of this option is important. This purchase is a very large investment. Compare the costs/benefits of renting as opposed to buying.
Do you have enough cash for a down payment — usually at least 20 percent of the home’s cost? Can you qualify for a mortgage loan based on your credit history and income level? Also, consider each of your careers: do you anticipate or is it possible an employer could move either of you to another city, state or even overseas in the near future? Are you planning a job change, or will you be starting a family soon? What’s the real estate market like in your area — is it a seller’s market, or a buyer’s market? Do you fully understand all the costs of home ownership — mortgage payment plus property taxes, insurance, maintenance and repairs, utilities, association fees, etc.? Even if you can potentially “afford” a home purchase, will you end up being “house poor” and short on savings?
By working with a Certified Financial Planner like myself, couples can get answers to these and other questions, as well as develop a comprehensive and realistic household budget which will provide them with a foundational tool for effectively managing their financial future and meeting their goals.
For more information on planning your financial future with a spouse or partner, visit my new website, http://www.moneyandmatrimony.us.