Financial Planning for the Newly Married: Some Pitfalls To Watch Out For
by Mark Hlavinka, CPAIf you have recently gotten married or are planning to do so, you will be faced with the need to make some important financial decisions. Among the main areas of financial concern are (1) life insurance, (2) form of property ownership, and (3) money management.
1. Life Insurance. A basic rule of insurance planning is that you need enough coverage to sustain your family’s present income level should you die. If you are the only breadwinner or plan on starting a family soon, you should probably purchase or increase your life insurance.
2. Property Ownership. If you and your spouse intend to buy or already own a residence or other major asset, you will need to consider the best way to hold that property. Will the property be held solely by one spouse? By both jointly? Because of the complex legal implications of the various forms of property ownership, you should consult a lawyer about this issue.
3. Money Management. It’s important to consider carefully how your day-to-day finances will be handled. You should discuss financial goals, resolve differences, and establish a budget and/or saving and investment plan. Will you have joint bank accounts, separate accounts, or both? How much do you want to spend on vacations? On monthly food bills? Entertainment? Gifts? What are your long-term financial goals? Do you have a financial plan, even an informal one?These are just a few of the areas that should be considered. Other areas that might need to be addressed are postmortem, planning and planning for the future of any children.
Professional guidance will be helpful in resolving many of the financial planning issues that flow from a marriage.
