CHICAGO, IL -- (Marketwired) -- 04/26/13 -- The vows have been exchanged. The honeymoon is over. Now comes the hard part. Now it's time, if you haven't already, to talk seriously about your money and your financial plan as a couple.
According to a study conducted by Money Magazine, 13 percent of couples say they fight about money several times a month. "Worrying about your finances as a single person is hard enough. Adding in another person's financial aspirations and money issues can make it that much more daunting and complicated," says Dean Urbanski, Vice President, National Sales Manager, BMO Harris Financial Advisors, Inc., a FINRA registered broker dealer and SEC registered RIA, and part of BMO Financial Group. "Agreeing on certain points financially can establish guidelines, direct actions and hopefully prevent future disagreements."
What should you do with your money now that you are joined financially? What should be on the list? And, equally important, how should the items on the list be prioritized?
According to Urbanski, the most important things to do in the short-term are the following:
•Have a conversation. Sit down and have a frank discussion about each other's money history. Don't be ashamed of mistakes made in the past. Commit to not repeating the mistakes again in your new life together.
•Create a spending plan or budget. Develop a written budget and make sure that each person knows about all of the expenses. In addition, you should decide together how both of you will contribute to household expenses. Even if one person is the primary bill payer, the other spouse needs to have an idea of what's going on.
•Set goals together. Besides getting a handle on income and expenses, it's wise to talk about the future and what you want individually. This does not mean you have to have the same goals but it's important to get buy in from each other on your hopes and dreams.
•Build an emergency fund. Create an emergency fund that equals three to six months of living expenses. If your adjusted gross income is below $166,000, put part of that money in a Roth Individual Retirement Account (IRA).
•Save for your home. If a home purchase is in your plans, begin saving for a down payment on a home. But, don't overextend.
•Save for your retirement. Save 10 percent of annual income, which includes contributing to retirement plans.
•Avoid debt. Steer clear from credit card debt if at all possible.
Urbanski concluded, "It's always a good idea to seek out and work with a financial advisor who can help you both identify your financial goals and work with you to develop a financial plan that can help you achieve them as a couple."
To find a financial advisor near you, visit www.bmoharris.com/financialadvisors.
To learn more about Money Smart Week visit, www.moneysmartweek.org.
About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and $542 billion in assets (as of Jan. 31, 2013).
Securities, investment advisory services and insurance products are offered through BMO Harris Financial Advisors, Inc. Member FINRA/SIPC. SEC-registered investment adviser. BMO Harris Financial Advisors, Inc. and BMO Harris Bank N.A. are affiliated companies. Securities and insurance products offered are: NOT A DEPOSIT - NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY - NOT GUARANTEED BY ANY BANK - MAY LOSE VALUE.
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