Five Things You Need to Know About Family and Household Finances
1. "How do I have a pre-marriage family finance discussion?"
Before you get married, you and your fiancé need to communicate about your current financial situation. Tell your fiancé about any debt or credit problems that you may bring to the relationship. During the discussion, you should also develop mutual goals. To do this, write out your individual short-term, mid-term, and long-term financial goals. Then, share the goals with your partner and discuss their similarities and differences. After discussing goals, discuss your feelings about money, including how you’d like to retire and how much you’d want to contribute to college funds for any future children.
2. "Which financial decisions should newlyweds make?"
When you get married, there are a variety of things you’ll have to consider changing with your finances. After having a financial discussion about your current situation as well as goals and financial values with your soon-to-be spouse, you’ll need to decide whether to combine your financial accounts or keep them separate. You should also review all of your credit accounts, to decide whether these should be changed to joint accounts.
3. "We’re having a baby! What’s the first thing we should do?"
Your family is changing and so should your spending plan. When creating your new family budget, remember to factor in often-overlooked items such as increased healthcare, clothing, and insurance costs, as well as the cost of diapers and other baby products. Find out the prevailing rate for childcare, and work out how you can factor the cost into your budget. Keep in mind that some of your expenses, such as entertainment and dining out, may decrease.
4. "What options do I have for paying for my kid’s college?"
The cost to educate children has grown rapidly in the past 20 years. Whether you have 18 years to prepare or your son or daughter is packing right now, you’ll have to decide how to foot the bill. If you plan on paying for all or part of your child's college education, you’ll need to develop a savings plan as early as possible.
Take time to learn about the various options for financing your child’s education. Here are a few suggestions:
- Student loans
- Private scholarships
- Section 529 plans
- College controlled aid
- Military aid
5. "How should I handle my personal finances after a divorce?"
Following your divorce, there are a few things you should do to move forward financially. Start out by getting a firm grasp on your financial situation by requesting your free annual credit reports and review them for accuracy. Make sure that your accounts listed on the report are indeed your financial responsibility. Also, determine a procedure to pay bills, make deposits and withdrawals, get cash and pay taxes. Using automated bill pay with your bank is the easiest way to make sure your bills are paid on time. This is probably a good time to make sure that you are doing all of your banking with the best bank for you. Review the convenience of the bank, as well as the fees and the benefits.