New York, NY (PRWEB) January 11, 2005
Getting married and combining your financial life with that of another person can be a big challenge, especially if you didn't have all your financial ducks in a row before the wedding.
But it also can provide an opportunity to get a nice head start on your financial goals. With two incomes now supporting one household, you're likely to have more money available to save and invest than before--at least until children come along.
To take full advantage of this window of opportunity, discuss and agree on the short-term goals that you want to accomplish over the next three years (such as paying off debt or saving for a home down payment), as well as your long-term goals, like early retirement or a college fund for the kids. It's critical for you both to feel committed to these goals, because they'll guide every major financial decision you make together.
One story from the Armchair Millionaire community illustrates how important it is for you and your spouse to have this kind of understanding:
"The first thing that had to happen was for my husband and me be in the same place financially. We had to come to an agreement on what we saved for short-term goals, invested for long-term goals and spent on living expenses. Once this happened, other money logistics, such as who balances the checkbook, fell into place. This has helped our relationship tremendously; we don't argue about money anymore. It wasn't easy getting to the same place financially; it took five years of learning each other's spending habits and the advice of a financial advisor to get us there." --Dana
In addition to goal setting, take care of the following laundry list of tasks that will help ensure that you and your beloved set off on the right foot financially.
The Armchair Millionaire's Checklist for Newlyweds
Change your beneficiaries. Every investment account and many of the insurance policies that you own have a beneficiary associated with them. Assuming that you want your new spouse to have those assets if you die, contact each to change the named beneficiary.
Deal with your debt. Take stock of the debt that each of you brought to the marriage and make a plan for paying it down, focusing on your high-interest consumer debt first. In addition, if you have multiple credit card accounts between the two of you, consider closing some of themÂthere's little reason for a couple to have more than three credit card accounts (one in each name to preserve an independent credit record and one joint account for shared expenses).
Review your insurance. Check for gaps or duplications in your insurance coverage. For example, if you've combined homes, make sure that your new homeowner's or renter's policy has sufficient coverage to protect your pooled belongings. If both of you have health insurance provided by your employer and are able to add your spouse to the plan, take a close look at whether one offers more comprehensive and cost-effective coverage, or if it makes more sense to just keep both policies. If you plan to have kids, don't forget to consider coverage for pregnancy and childbirth.
Create (or update) your will. See an attorney and get this important item out of the way. Everyone tends to put off this task, but you'll probably find that it's easier than you thought.
Split up the chores. Who's going to pay the bills? Balance the checkbook? Prepare the tax return? Whoever is primarily responsible should report back regularly to the other so that everyone is on the same page.
The Bottom Line: Achieving financial tranquility can be one of the most challenging aspects of marriage. Give yourself the best odds for getting there by mapping out an overall financial plan with spending, saving and investing goals that will work for both of you.
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Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at http://www.armchairmillionaire.com.
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