Goal and Career Planning
It's important to know not only where you are, but where you want to go. Define what you want, and the means to get there will become much more apparent.
No matter what your other goals are, a comfortable retirement should always be on your list. The degree of comfort, however, is entirely up to you. If you want to live in luxury in a beach house in Florida, you'll need to save a lot. But even if you don't plan on living the high life, you need to set something aside. After all, you won't be able to work forever. Start planning now so that you're not forced into a difficult position when you're older.
Get Out Of Debt
If you have considerable debt, one of your first goals should be to pay it off. The interest you pay is sabotaging your other financial goals. Once you get out of debt, the rest of your goals should be much easier to reach. Start by getting an accurate picture of your entire debt. Then, working with your budget, construct a plan to pay it off. Try to trim other areas of your budget and increase your monthly payments on that debt until it's a thing of your past.
Do Both Of Us Have To Work?
In our society, double-income families have become the standard. But there's no reason you have to be standard. If both you and your spouse are career oriented, that's great. You can both continue to work and really rake in the money. But if money and career aren't strong motivating factors in your life, you may be able to work out a plan that allows you to live on one income. You don't need kids to stay at home. If you take a hard look at your budget, you may be able to afford it now. Otherwise, you and your spouse may be able to work out a plan, paying off your debts and increasing one income, to allow one of you to stay home. Even though vows now hold you together, you may still want to act separately in some areas.
Once you're married, you will have the option of filing your annual income tax returns separately or filing them jointly with your spouse. Filing jointly simply means that you will, as a couple, add your income and deductions together. You can team up with your spouse or partner to reduce taxes by contributing to spousal RRSP plans. Basically, the higher-income partner contributes to the spouse's RRSP to reduce their taxable income. When the funds are withdrawn, they will be taxed at the lower rate of the recipient's plan.
Most couples file jointly, because it is easier to file one return rather than two, and some deductions and credits are limited if you are married and file separate returns. If your taxes are not complicated, it may be beneficial for you to figure your taxes both individually and jointly to determine which method gives you a better result. If your taxes are complicated, you might want to consider asking the advice of a tax professional.
- Bank Accounts
You'll have to decide how much financial autonomy you want to have. You can keep separate bank accounts and divide the bills you have to pay. That will offer each of you some spending money to use freely. Another option is to put all of your income into one account and pay all your bills from there. This option requires some skill, making sure you aren't spending too much of the family's money on yourself. A combined approach is also possible. Maintain a joint account while allocating "individual spending" money each month. If you decide to hold any of your accounts jointly, be sure to keep track of your transactions carefully and to communicate them to your spouse. With two individuals using one account, tracking cash flow may be difficult.
- Credit Cards
You should each keep at least one credit card in your own name, to maintain a credit history of your own. If you divorce, or one of you dies, it will be much easier to get a mortgage, loan or credit card with some individual credit activity.