Along these lines, never co-sign on a loan for anyone. Co-signing basically means if, for any reason, they can’t pay back the loan, you are responsible. Unless you are willing to assume the payments for this loan and a lowered credit score, don’t do it.
If you are getting married, get a prenuptial agreement. I know this may counteract romance, but marriage is a legally-binding contract and must be looked upon this way. Remember, you are entering into a financially-binding contract between two people. You need to protect your assets. For example, if you have been working on an IRA, make certain he is not entitled to it should you get a divorce. And this goes for all assets accrued during the course of your marriage. Once again, I have seen friends of mine lose a large amount financially because they didn’t have a prenuptial agreement in place. Also, don’t take on your spouse’s debt when you get married. Make certain both members are debt-free before deciding on marriage. Don’t be afraid to talk freely about both of your financial situations before you get married. You need to know this information and it should not be considered rude or intrusive for you to ask. Make certain you know who you are dealing with and what their financial situation is before you enter into marriage. Remember, choosing a fiscally irresponsible partner will ruin your financial well-being.
Throughout my investing, I have learned to find financial friends. These are people that I have learned about investing and saving from. Whether this is a trusted friend, family member, or someone you can call a mentor, it is important to have someone to confide in and ask financial questions to. For example, one of my friends was the Valedictorian at Harvard and was a former day trader on Wall Street. I am always emailing and calling him for financial advice. He is someone I go to when I am making financial decisions and I feel confident in his advice because I have known him for almost 20 years.
Also if you are in your 20’s or 30’s, keep 80% in stocks and 20% in bonds because you have time to ride out the stock swings. If you are in your 50’s and 60’s, keep 40% in bonds to help your portfolio when stocks are slumping. Don’t stop investing into your retirement accounts even if you have a difficult year. As much as you can, continue to invest yearly.
And finally, have a financial nest egg for emergencies. This should be enough to cover all of your expenses for up to eight months in case something comes up. I know this sounds like a lot, but you don’t want to rack up massive debt, and the interest payments that go with it, because of an unexpected emergency. If you are married, put this emergency fund in a separate place so no one has access to it except for you. This is something for you to fall back on just in case you need it.
By following these simple steps, you are off to a good start towards your financial destiny. Remember, you can control a secure financial future and there’s nothing more valuable than that.
