In just a few short days I will be standing on the most beautiful beach in America (as rated by Dr. Beach), saying “I Do” to the most beautiful woman in the world (as rated by me). We were engaged last May so of course we’ve spent the past year preparing for this day. Aside from the flowers, photographer, reception venues, food and everything else that goes into a wedding, we were also doing some other preparations that you would probably expect out of a couple of CPA’s.
We discussed our finances and diligently saved towards the wedding so that we wouldn’t be left with a mountain of debt to start our new lives together. We looked at each other’s health insurance and car insurance plans and found ways we’d be able to save some money once we were married. We ran tax projections to adjust our withholdings for the 2011 tax year. We updated our wills and estate planning documents. We made sure our beneficiary designations were up to date (as Kelly discussed in May). There are many aspects of our finances that are significantly affected by marriage, just as they would be by other major life events.
This got me thinking about how important all of this planning can be for anyone who is facing major life changes. In addition to getting married, these could include:
- Having children
- Changing jobs
- Getting a big promotion/raise at work
- Getting divorced
- Having grandchildren
- Losing a loved one
Of course not all of these should be treated the same and not all of them will create the same planning issues. Each of these events brings along their own unique issues and they provide you with a good opportunity to step back and consider their impact on your personal financial situation. If you are moving you might need to get a handle on what your expenses will be in your new residence and what the state taxes are if you are changing states. If you just got a big promotion, you might be in a new tax bracket and maybe your tax withholdings should be adjusted. If you just had your first grandchild, maybe you want to add them to your estate planning documents. These are just a few examples of what to consider in these scenarios.
If you are facing any kind of major life change, we would be happy to sit down with you to discuss some of these issues. It can be very important to your future financial success that you handle these correctly and plan accordingly. As always, let us know if you have any questions.