Tuesday, September 23, 2008

Young Woman's Financial Planning Guide

Marriage & Money: Joining Assets the Smart Way

You’ve imagined the scene before. Your partner has finally mustered the courage to pop that proverbial question. There are tears, you say yes, the ring is perfect. Pretty soon, your life is a chaotic flurry of decisions: Canapes or mushroom caps? Mauve or lilac taffeta bridesmaid dresses? Hawaii or Florence?

Getting hitched is certainly an exhilarating time in a young woman’s life, but important concerns often get lost amidst the amorous atmosphere. Marriage is a serious commitment and, as such, should be approached responsibly. Specifically, you and your spouse-to-be should think about the financial implications of the consolidation of your lives.

According to Betsey Stevenson, assistant professor of business and public policy at the University of Pennsylvania’s Wharton School, “A lot of the debates people have about money are code for how we want to live our lives.” If you and your mate seem like financial opposites, don’t fret just yet. Making use of the tips below may help you bring about a more compatible financial relationship:

Make expectations clear: There are many financial concerns to be considered when starting a family. Private or public school for the kids? A life of thrift or a life of extravagance? When expectations are made explicit from the beginning, you and your husband can keep financial skirmishes to a minimum. According to Karen Altfest of the New York firm L.J. Altfest & Company, weekly meetings to discuss finances will help a couple stay “in sync with each other’s goals.”

Forge a financial partnership: You and your significant other may benefit from constructing a budget and keeping track of your finances together. Decision making in respect to these aspects should also be done together so as to avoid rifts down the road. According to Mary Ann Sisco, national wealth adviser at JPMorgan’s private wealth management division, “When [you] are making the decisions together, [you] really have ownership of those decisions and any results of those decisions.” So, even if the choices you make together turn out less than favorably, neither spouse will be able to play the blame game.

Decide on long-term financial goals: Though such issues as retirement and paying tuition may seem like distant notions in the eyes of newlyweds, getting a jump start in respect to these matters is a very financially sound decision. You and your spouse may want to set specific goals (e.g. saving up for the cost of private college tuition for two children) and start investing now in order to ensure maximum growth over time.

Visit the WISER website and explore such fact sheets as 5 Money Mistakes Women in Couples Should Avoid to learn more.

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