First Year Finances
When Financial Opposites Attract
Continued (page 2 of 2)
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Beyond opening a joint account, the newlyweds admit the financial routines they began once moving in together haven't really changed. They don't budget per se, and compromises have had to be made from time to time. "There are things we haven't been able to do," says Candice. "For example, we had a getaway planned that had to be scrapped when we needed new tires for the car." Though creating a budget isn't something the Coppolas do regularly, saving certainly is. Says Candice, "We save up for things we want and use our money to buy them."
Now that their honeymoon is paid off, the couple is looking towards future investments. "We'd love to move to a new house and start saving towards raising a family," says Candice. Adds Mike, "I'd like to pay off some bills, like car loans." With this in mind, they both agree they should set aside time to speak with their accountant and financial planner. In the meantime, Mike invests 10% of his income in a 401(k). "I also have other savings bundled in with my life insurance plan."
So after being married for almost two years, do the Coppolas feel richer or poorer? "I feel the same," says Candice. As for Mike, "The same," he starts. "Okay, well, before I got married I had a lot of money; now I have less money."
One thing the two definitely agree on is their mutual trust. "We talk about everything," says Candice, "and never make a decision without the other." One decision she says that's already in the works: "We both see the value in passing along financial tools to our children."
The Experts Weigh In
A definite plus for the Coppolas is the fact that they work with both an accountant and financial advisor, something Snyder says they should do often. "Make meeting with your financial planner and accountant a priority," she says. "Do it now, at least annually and concurrently with any life changes."
Snyder has other action steps the Coppolas should consider. "If you haven't done so already, consult a real estate attorney and review having the house titled house jointly."
As for getting into the habit of using credit cards to pay for expenses, Snyder offers words of caution. "Be careful using credit cards, and only use them if you have the ability to pay the balances off immediately. Nothing eats into current cash flow (and potential future savings) like the high interest charged on credit card balances."
Snyder also suggests the couple consult with an attorney and have wills drawn up. In addition, she advises Mike, "Carefully analyze the savings component of your life insurance plan. Often there are substantially better investment choices available."