By Erick Olson • 770-740-8744
Olson Associates • www.financialmaximiser.com

 

SAVE FOR TOMORROW
Newlyweds often neglect long-term investments, such as an IRA’s and 401k’s, because they're overwhelmed by short-term needs (a bedroom set, new tires, debt). Don't fall into that trap - saving can be easy. Obviously, the sooner you start saving, the more you'll have in the end. You'll make interest on prior interest earned. Therefore, your money is actually making more money for you as the years go by. You might be surprised how drastic a difference 10 years of saving can make. For example: A person saving $5,000 a year (earning 10-percent compound interest) for 25 years will make $500,000. A person saving the same amount of money (a total of $125,000) over 15 years will only make $264,000!

 

KEEP A CASH RESERVE
That monthly cell phone bill is a standard expense, but flying to your cousin's wedding was not in your budget. Once a month, have a financial review with your mate (it may not be as romantic as dinner and a movie, but it's just as necessary). Review your finances from the previous month and look to see if any unusual payments might be on the horizon - like recurring bills that aren't monthly (auto insurance) or discretionary expenses like a baby shower gift, a weekend getaway, or a new vacuum to replace the one that conked out. Work all of these expenses into your budget so nothing takes you by surprise.

 

REV UP THE RETIREMENT ENGINE
Put something toward your 401(k), even if you're in debt or struggling to save money. These are crucial years to be saving for that Golden Girls lifestyle. If your company has a match program (usually six percent), try to add the entire amount. If you both can't swing it, consider each putting 3 percent into your programs. Either way, stretch your budgets to squeeze something into this investment. But do not max out if you are saving for a home or other investments.

 

CHOOSE YOUR INSURANCES WISELY
Health insurance is a no-brainer. You need it. But now that you've merged lives, you can save cash if you merge health plans too. Review the plans offered by each of your employers and see if it's financially smart for both of you to be on one plan or each have your own. Choose the plan that has the best benefits at the lowest cost. Don't be put off by high co-pay, because it might mean a lower monthly premium. Also consider purchasing Long term Disability Income protection through your employer. More often, the coverage is more affordable through your group coverage.