Cents and Sensibility


Financial tips for newlyweds

If you've just gotten married, then you're probably still basking in the excitement of your special day. And well you should -- your wedding should be an experience you'll always cherish.

After you've returned from the honeymoon and opened the wedding presents, you'll want to begin your married life together on a positive note.

One of the smartest things you can do is get a grip on your finances -- right from the start. Here are a few suggestions for doing just that:

>> Communicate. Discuss your approaches to handling money. One of you may be a "spender" and the other one a "saver." Develop guidelines for resolving your differences.

>> Develop a debt-reduction strategy. Decide how debts accumulated before your marriage, such as student loans, will be handled.

>> Draw up a budget. By setting up a budget, and sticking to it, you'll reduce the likelihood of living beyond your means.

>> Consider your life insurance needs. If you need both your incomes to manage your household expenses, consider purchasing a life insurance policy. This may be more of an issue when you have children.

>> Manage credit wisely. Consolidate your credit cards. Try to get by on just one card -- and use it only for emergencies. Credit-card debt is one of the leading sources of financial difficulty for newlyweds.

>> Pay yourself first. Every time you get paid, deposit a small amount into an investment vehicle. Not only will this help build up your financial resources, but you'll also get into the "investment habit" -- which should last a lifetime. While this method can't guarantee a profit or prevent a loss, it ensures that you won't invest all your money at a market high. This method depends on investing over the long-term and you should evaluate your ability to continue investing through good and bad markets.

>> Choose appropriate investments. At this stage of your financial life, time is most likely on your side. Consequently, you may want to put most of your money into growth instruments, such as stocks and stock-based investments. It's true that stocks are more volatile, on a day-to-day basis, than other investments. However, although past performance can't guarantee future results, stocks have historically outperformed other financial assets over the long term. By investing relatively modest amounts of money on a regular basis into growth instruments, you have the potential to eventually achieve significant capital appreciation.

>> Take full advantage of all your savings opportunities. If your employer offers a 401(k) or other tax-advantaged retirement plans, contribute as much as you can -- and put most of your money into the growth funds that are offered.

Guy Steele is a financial planner and head
of the Pali Palms office of Edward Jones. Send
planning and investing questions to him at 970
N. Kalaheo Ave., Suite C-210, Kailua, HI, 96734,
or by email at:

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