Thursday, July 8, 2010, AM | 1 Comment
For a variety of reasons, few two-income couples take full advantage of their financial power, and they generally don’t concentrate on making their money work for them. If you both were living separately, you would each have rent or mortgage payments with all kinds of bills to pay. Besides, you would each tend to dine out a lot. So take advantage of being a couple and don’t spend all of your double income. Use it to your advantage.
Both may have different attitudes about money
There are generally two types of people: savers and spenders. For better or worse, they tend to marry each other. That creates conflicting views of money and how it should be spent or saved and invested.
The problem is created when you find yourself trying to control the financial behavior of your partner in ways that generate conflict. The solution can be to sit down with each other and confront your money attitude. Be open and be honest. Discuss how best to handle your finances. You would be surprised how easy it can be to come up with the middle of your created financial road.
Share your financial chores
In many households, the financial chores are split between the couple. One person pays the bills and balances checkbook while the other invests and does the taxes. However, many experts suggest it’s far better if both of you understand and are responsible for all aspects of your finances. You never know when you will have to take control of the entire job of your household money management.
Reconcile tax strategies
Spouses often have different views about how to handle their income taxes and organize their records. If both of you sign the return, each is liable for any mistakes made. One option is to seek the help of professional tax preparer. Better yet, you can use the free tax software to prepare your own taxes together.
401(k) and / or IRA offer a tremendous opportunity to save for your future. Some couples leave retirement planning to the higher earner. However, that can cause two problems:
- The couple doesn’t save enough to meet their retirement needs.
- One of them may be at a disadvantage if they ever divorce.
The solution can be: if you can’t afford to contribute the maximum amounts to two company savings plans, concentrate all your savings in the plan that offers the best deal.
For working couple, you might need additional life insurance to replace some of the income that would be lost if one spouse died. However, make sure that the policy can be converted to cover a surviving spouse without a new physical exam.
Compare health plans between the two and figure out how much you could save by dropping one of them. If the savings are considerable, find out if you can temporarily drop one and then get back into it later without being subject to restrictions for preexisting conditions. If not, consider keeping both health insurance plans, despite the extra cost.
Living on one income
Nothing remains the same forever. One of you may decide to take some time off from work or may be laid off. In that case, you must change your attitude about money, spending less and sometimes a lot less.
In a Nutshell
From the beginning of your marriage, start automatic monthly deductions from your paycheck and investing it into stocks, mutual funds. Let your money work as hard as you can work for it.
- Jul 20, 2010: Chuck Jaffe: A financial talk before the kid heads to college | Uncategorized | Information about Car Trading!