Financial Focus for Newlyweds
Money is an important topic in any relationship. It is important to establish communication and mutual understanding about the financial roles and responsibilities. Treat financial successes and strains with joint consideration. Do not mortgage the future to pay for the present, and do not allow financial obligations from the past become seeds for dissention in the present. Prepare for unexpected expenses, set goals together and establish a common system of rewards.
Top Five Financial Suggestions for Newlyweds
The following are the Top Five Fundamentals for Financial Fitness from the Alliance of Cambridge Advisors:
1) Save at least 10% of your annual income
2) Have sufficient liquidity in your investments or savings to respond to emergency situations
3) Fully fund your pension or retirement accounts
4) Buy the right size house for your income
5) Pay off credit cards and consumer debt
Talk about money as a team. Discuss your money personalities and responsibilities. Do not use income or expenses as a weapon in arguments or against one another. Do not keep any secrets like hidden bank accounts or secret credit cards, as secrecy breeds distrust. Some couples maintain separate bank accounts and credit cards for personal savings or to build individual credit ratings. Some couples keep separate accounts for business and personal use for easy expense tracking. Shared or separate accounts, be sure to communicate your plans and intentions with one another.
Share your feeling about money, when you are excited and when you are concerned. Neuroeconomic studies, which measure mental and emotional activity as people make economic decisions, have shown that a $500 loss feels two and one half times worse than a $500 gain feels good. So to balance the bad feeling from a $500 loss, you would need to have to gain $1,250. How will your emotions impact your financial decisions, your investments and your interaction with one another?
Once a year set aside a couple of days to review your credit report together. You can obtain your annual credit report from www.annualcreditreport.com Review and update life insurance beneficiaries, wills and power of attorney as necessary. Treat the yearly review as a private getaway from family and friends so you can focus on your financial future together. This mini vacation is an investment in your relationship and your future.
Discuss what to do with tax returns, should the money be spent on indulge yourself on vacation, saved for retirement or invested? What other significant income or expenses do you expect to encounter in the coming year? How much expense represents a significant change in your financial foundation, so much that it warrants communication and joint commitment? Would you consult with your spouse before buying clothes, furniture or a car? How much would you spend independently? Have you thought about how you would respond to your own habits if they were reflected in your spouse? Talk about it.
To read this full article in the Spring Financial Focus Newsletter, please go to http://www.ExecutiveBlueprints.com/tips/20070301_finclfocus.pdf
Financial Focus contributed by:
Tu (Tony)
Bui, PFP
BUI Financial
Advisory LLC
2102 Business Center Dr.
Irvine, CA 92612
Phone (949) 253-4601
tonybui@buiadvisory.com
"Fee Only Planning. The advantage of unbiased advice."
For more information on the Alliance of Cambridge Advisors, please visit http://www.cambridgeadvisors.com
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Words of Wisdom
"There's only one way to have a happy marriage and as soon as I learn what it
is I'll get married again."
- Clint Eastwood
"Marriage. It's like a cultural hand-rail. It links folks to the
past and guides them to the future."
- Diane Frolov and Andrew
Schneider,
Northern Exposure, Our Wedding, 1992
"The ritual of marriage is not simply a social event; it is a crossing of
threads in the fabric of fate. Many strands bring the couple and their families
together and spin their lives into a fabric that is woven on their children."
- Portuguese-Jewish Wedding Ceremony
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Executive Blueprints, Inc is
not engaged in rendering legal or financial advice.
These articles are not a substitute for the advice of an attorney or
accountant.
If you require legal advice, you should seek the services of an
attorney.
If you require financial advice, you should seek the services of an
accountant.
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