Opening the right financial accounts is a good starting place. Here’s what you’ll need to do:
Set up a joint checking account with your partner to manage household bills. The two of you can discuss the specifics of how this money will be used, but you’ll probably use this account to pay your rent or mortgage, utilities, groceries, insurance, car loan, gasoline and other basic household expenses. To be sure you always have enough to cover the basics, it’s a good idea to set up direct deposit of at least a portion of your paycheck(s) — enough to cover all your monthly bills.
Then, you have a decision to make:Will you each maintain your own
individual checking accounts as well? Some couples prefer to put a portion of their pay into separate accounts, others choose to use the joint account for everything. Either way, it’s a good idea to decide together with your partner whether there should be limits to how much one of you can spend without consulting the other.
Open a savings account to build up an emergency fund. Financial experts recommend that you keep at least three to six months’ worth of living expenses in an easily accessible,
liquid account. It takes discipline to keep building your account until you reach that amount, especially in the face of rising everyday expenses. However, if you experience a job loss or medical emergency or need car or home repairs, you’ll be thankful that cushion is there for you. It can keep you afloat during lean times and keep you from racking up credit card or other debt that could take years to pay off. Remember, you’re bound to encounter a few hurdles in life. Being prepared can help keep them from becoming disastrous.
Open a savings account for each child as your family grows. A savings account is a basic tool for teaching your children about the importance of saving and spending wisely. They can learn to save for a special toy when they’re young and then use the account to save for college, a car or other major expenses when they’re older.
Set up investment accounts for long-term goals. For big goals that are far into the future, such as a comfortable
retirement and a
college education for the kids, your money needs the growth potential that the stock market offers. It’s a good idea to start building toward these goals right away, even if you can only afford to
invest very small amounts at first. Time can be your most valuable ally in long-term compounding.
And more?Some people choose to set up additional accounts, such as
savings accounts devoted strictly to vacations or holiday spending. If that helps you manage your money more easily, go for it! The accounts outlined here should get you off to a good start and cover all of your basic needs.
Please note that neither this financial institution nor any of its affiliates give tax or legal advice. Consult your tax advisor regarding your individual circumstances.
