Congratulations on your marriage, but do you have a good financial plan? . . . Oh, really, you don’t yet? Perhaps we can make some suggestions for you.
First, Organize! In order to understand your finances, you have to have good numbers. Figure out your income, and look at your spending. Take a couple of months and figure out where your money goes. Put things in categories like “Home” and “Food” and “Entertainment.” Once you know what the whole thing looks like, you can focus on potential problems.
Second, Plan! If things stay the way that they currently are, how much money are you going to make or lose overall in the next year? How about in three years or five years? What about ten years? What things are you working toward, and how much do they cost? Figure these things out together so that you both know how your money is going to be saved and spent.
Third, Save! If you have an emergency next month, are you going to have enough to cover it? Most Americans live paycheck to paycheck, but the ideal is to have at least three to six months of your combined gross income available to cover emergencies.
Fourth, Save! Yes, we acknowledge how hard this is, but saving is just that important. Aside from emergencies, you should be saving for retirement as well. If your employer has a retirement plan, contribute as much as you can! Your employer may have a plan that matches what you put in to a certain amount, and it’s a great idea to contribute at least that much, but we recommend as much as you can generally afford. Remember, the earlier that you start saving, the more you’ll have and the better retirement you’ll have.
Five, Involve Lawyers! It really is important to have a will and a set up financial power of attorney so that your assets, mutual and personal, will be protected and go where you both want them to go. Some protections come from just being legally married, which is why same sex couples were so determined to fight for those rights, but those benefits are limited and there are other things that you may want to cover with a lawyer that go beyond that.
Any good CPA can provide more good planning advice specially tailored to you and your situation. If you’re looking for an excellent CPA, consider contacting us.