We're Getting Married!

We're Getting Married!

As tax time looms around the corner, we think about how much we earned, what we would change, what we can improve on, and how to live our best lives. In some years we move, change jobs, buy new cars, etc. In other years, we may have landmark life changes. I like to classify these changes as events that require you to check off a new box on your taxes.


We're getting married!
You're taking the big plunge, and then you wonder what, exactly, you jumped into. If it's not the cost of the engagement ring, it'll be the cost to insure it. Then the cost to reserve the wedding site, the band or DJ you've been dreaming about, the best photographer, the flowers, the perfect gown, the hors d'oeuvres, the cake...the list, and the costs go on and on, and you haven't even figured out the guest list!

By far, the biggest change I had to make when I got married was thinking like a team member, not a soloist. I had been an independent, working person for over a decade by the time I got married, and then I had to start thinking about joint checking accounts, joint taxes, shared expenses and obligations. It may be one of the last things that most engaged and newlyweds choose to do, but having that big financial conversation should be on the top of the to-do list. Often, it is helpful to have a third party, like a financial planner, run the financial conversation so the couple can take the emotions out of the conversation.

As I've found out in my first long year of marriage, meeting in the middle is key. Like easing into a swimming pool, my husband and I have started with a slow compromise of "yours, mine, and ours"—bank accounts, that is. We both get our way, but we also have our shared account, and slowly but surely, the joining of our accounts and bills has grown with our marriage. Once we've gotten the daily finances down, we're able to really start sharing our dreams and planning OUR future.

Welcome home!
You made it through the gamut of open houses, loan applications, and escrow papers. Now with keys in hand, you're done! Until the first mortgage payment, the dreaded property taxes, and the first time something breaks in the house. If you're in the process of saving for a house or looking for a house to purchase, qualifying for the loan is just the beginning. With interest rates are the lowest in decades, and a glut of houses that have yet to be foreclosed, the housing market has never seemed like a better bargain.

But the same home-buying frenzy that led to the housing crisis may lead to a bad decision as well. The main issue is determining affordability. Yes, there's a tax deduction for being a homeowner, but will that offset the added costs of property taxes, insurance, and house repairs? This requires more number crunching and budgeting than most people would ever want to do, but the ability to anticipate many of the costs of homeownership will help ensure that you don't sacrifice the American dream of retirement for your living expenses today.

We're having a baby!
I've always felt that you become a real grown up when you have a baby. You're now the one responsible for raising a little human! This is an excitingly terrifying time where planning is of the utmost importance. If a wedding is expensive, having a child is exorbitant. According to a survey conducted by the Agriculture Department of households earning an $118,200 annual income, the cost of a child from birth to age 18 is $289,380, which equals approximately $17,000/yr. These figures don't even include the cost of college, which is increasing at a rate of 6-8%, annually.

The key to having children is accepting the enormous responsibility of bringing a new life into the world. First and foremost is creating security by obtaining (more) life insurance and writing a will and/or estate plan. This ensures that your family will be protected in the worst-case scenario of the death of a parent. A will and estate plan can ensure that your intentions for your children are outlined and that your property is transferred correctly, and life insurance can guarantee that the financial costs for your children will be taken care of.

Once you've secured protection for your family, it is every parent's goal to give their child a good head-start. It may be educational games, one-on-one instruction at a preschool, organic foods, etc. Just like with retirement, starting early and saving often is the key to being successful when paying for college education as well. Using an education plan such as a 529 Plan can allow for tax-free savings and growth, plus it enables family and friends to contribute to the same account. After all, how many toys can one kid play with?

Don't let a big life change derail your financial plan. Be proactive and let your plan allow you to reach these life dreams.

endy Wan Turk
Gerber Kawasaki Wealth & Investment Management
2716 Ocean Park Blvd., #2022
Santa Monica, CA 90405
310-441-9393

Securities offered through LPL Financial, member FINRA/SIPC. Investment advisory services and fixed insurance offered through Gerber Kawasaki, Inc., a registered investment advisor and separate entity from LPL Financial.

This material contains forward looking statements and projections. There are no guarantees that these results will be achieved. Investing involves risk including potential loss of principal.