ONE OF the challenges newly-weds face is adjusting to, or reviewing, their new financial status. Each individual must now manage his or her own spending, as well as make adjustments to accommodate the financial personality and skills of the other.
Planning is, of course, essential. In order to do this, you may require help from a financial adviser. Naturally, the age of the couple and asset holdings of each individual will play a major role in determining their options.
Here are a few guidelines for the future.
GOALS
Determining short and long-term goals sets the course for the basis of an investment portfolio. Marriage may change an individual's goal as it is no longer just me but rather us. A likely long-term goal may be for example, purchasing a home. The next step would be deciding on how much to invest and what to invest in, in order to make this dream a reality.
KNOW WHERE
YOUR MONEY IS GOING
The first step in any budget is to know how your money is being spent. A single person spends his or her money as he or she wishes. However, such decisions now affect your partner.
An excellent start is to track your personal spending for one month by writing down all expenditures. This procedure will lead to a mutually-beneficial means of merging spending habits.
Couples should itemise all accounts and investments. This will provide a true picture of what they are working with, thereby enabling them to make better decisions.
Take the time to decide on what your financial goals will be, for example, home ownership, further education and retirement
Younger couples can afford to be more aggressive about investing in equities/stocks as they are more likely to be able to weather the normal ebbs and flows of the market. However, it is best to seek professional advice to determine the most suitable products to invest in.
A more conservative, that is risk-averse couple, may prefer to invest in long-term, tax-free accounts. Unit trusts are also great options for investing.
ESTABLISH AN ACCOUNT
Consider a joint account for shared expenses such as rent and utilities, while maintaining individual accounts for personal expenses.
Questions will arise regarding how much each party will place in this account? Is this amount to be a flat sum or, a percentage of salary?
There are no right or wrong answers to these questions, as it all depends on personal preference .
DEALING WITH DEBT
Many couples avoid the issue of how to deal with debt that may have been incurred prior to the union.
This may not be a very romantic topic to deal with but it is an issue that requires attention, as it impacts on the disposable income each person will have.
THINK ABOUT THE FUTURE
Establish an emergency cash reserve for any unforeseen emergencies that may arise such as redundancies. The recommended reserve is three months' salary. Contributing to your pension plan offered at work is also an excellent idea.
The point of such a plan is to ensure that you both will be financially stable for retirement.
To further discuss investing and the many options we have available, contact DB&G at info@mydbg.com or toll free at 1-888-CALL DBG.
