Creating a Plan for the Future
Take the time to create a written financial plan with clear goals
What about the lifetime to follow? Whether this is your first or second wedding, your dream wedding or a spontaneous ceremony, the Òpractical implicationsÓ of sharing your life with another person will surface before you know it. Your financial happiness is essential to a successful union.
Organizing your finances might not seem like an exciting part of planning your lives together, but if you start now, you will have a lot more fun and excitement in the years to come. Taking the necessary steps for a sound financial future is not as complicated as you may anticipate. Here are some tips from SBLI USA Mutual Life Insurance Company, Inc.
1) Come up with a Budget: You probably already have your own budget, but now you are planning income and expenses for two. ItÕs your joint decision as a couple whether to combine finances and itÕs something you should decide upon at the outset.
If you combine your income and expenses, you will need to combine your budgets as well.
Make sure to take into account housing, food, utilities and transportation, as well as student loans, credit card balances, car payments, taxes and if it applies, alimony and child support. For further tips on creating a sustainable budget read ÒBecome Your Own Financial Advisor: Tips on Planning a Budget and Sticking to It.Ó
2) Set up Bank Accounts: If you decide to open joint accounts, consider creating both a joint checking and a joint savings account. ItÕs important to keep up your savings even after the big day.
Saving first and spending what remains will help you to build wealth and live within your means throughout your life together. Decide what additional investments youÕd like to make apart from your regular savings account.
These types of wealth-building efforts are extremely beneficial, and lend to a happy marriage later in life.
3) Create a Plan for the Future: Take the time to create a written financial plan with clear goals. The plan should include specific and realistic steps to achieve your dreams, including buying a home, starting a family, taking vacations and retirement.
Some key steps include maximizing your 401(k) contributions, setting up an emergency fund, paying off consumer debt and saving at least 10 percent of your take-home pay. Using financial planning software, such as Quicken, can help with keeping track of your expenses and investments.
Decide what your tax filing status will be for the year. Make sure you consider the difference between married filing separate versus joint filing, based upon your particular circumstances. Consult your tax advisor if you are unsure.
4) Purchase Life Insurance: There is a common misconception that couples only need life insurance once they have children. This is not the case. Once you get married your spouse automatically becomes your dependant.
Forty eight million Americans either donÕt own life insurance and believe they should, or own life insurance and believe they need more, according to a study conducted by LIMRA International. This is a great time to make the change.
Purchasing life insurance will give you the peace of mind of knowing your loved ones will have money to help maintain their standard of living should anything happen to you. To access a variety of financial information tools, as well as learn more about life insurance,visit www.sbliusa.com.
5) Double check your beneficiaries: As a new husband or wife you should be sure to also check the beneficiaries on all of your other accounts in addition to life insurance, including 401(k)s, IRAs, money market accounts, and CDs. You may want to have a discussion about who will be beneficiary on which accounts, so that each of you feels adequately protected.
ÒMany times we receive phone calls from customers and learn sadly that the deceased wishes are not being fulfilled because of failure to change a beneficiary when a marriage occurs. We advise all of our customers to keep beneficiary designations up to date.Ó says Mariam Eisenberg, senior vice president of SBLI USA.
Getting married is a new step and a fresh start in life. Use it as an opportunity to get a fresh start on your financial well being.
Take a break from the wedding magazines, food tastings, dress or tux fittings, and stylists. Spend a few minutes planning your life beyond the big day; your relationship and your financial future will benefit greatly.