Four Steps to a Simpler Financial Life February 13, 2012

For many Americans, financial life seems to be getting more and more complicated. Perhaps that’s because more workers bear responsibility for their own retirement savings thanks to the proliferation of 401(k) and other plans. Or maybe it’s because there’s so much information and so many investment choices to sort through. Whatever the case, here are some suggestions that may help to simplify your financial life.

1. Start with a Plan

A little time spent planning now can benefit you later. First, determine short-term financial goals. Do you want to purchase a home in five years? Are your kids heading off to college soon? Is buying a car a top priority next year? Next, think about long-term goals, such as saving for retirement and, if your children are young, college expenses. Estimate how much money you’ll need to meet each of these goals.

2. Build a Better Budget

Next, look at your current monthly net income and then set up a budget. Creating a budget allows you to see exactly where all your money goes and to determine where you can scale back. After making cuts, invest that money to help pursue your financial goals.

3. Invest Systematically

You can take time and guesswork out of investing with a systematic investing program. With mutual funds, for example, you can make arrangements to automatically invest a specific amount of money on a regular (e.g., monthly) basis, a strategy also known as dollar cost averaging.^* In addition to making investing easier, dollar cost averaging could potentially save you money. You’ll buy more shares when prices are low and fewer shares when they’re high. Over time, the average cost you pay for the shares may be less than the average price.

4. Rely on an Investment Professional

While the financial world is far more complex than it was just a few years ago, you don’t have to go it alone. Think about tapping into your investment professional’s expertise before making any major change in your investments. He or she can help you to evaluate how new tax rules and changing market conditions may affect your portfolio and, in turn, your financial goals.

*Dollar cost averaging involves regular, periodic investments in securities regardless of price levels. You should consider your financial ability to continue purchasing shares through periods of high and low prices. This plan does not assure a profit and does not protect against loss in declining markets.

© 2011 Standard & Poor’s Financial Communications. All rights reserved.

Marriage: Entering a New Investment Life February 10, 2012

There are a lot of issues that couples need to think about when tying the knot — wedding preparations, family, and, of course, finances. Addressing personal finance and investment issues before the big day may help improve your odds of being together years later. Here are some financial issues that you should consider when embarking on a matrimonial journey.

Discuss financial styles before marriage — Start your marriage off on the right foot by having an honest discussion about financial habits and objectives. Are you a saver, but your prospective spouse lives paycheck to paycheck? Do you prefer investing heavily in stocks, but your fiancé’s portfolio is filled with bonds? What are each of your short- and long-term financial goals?

Think holistically — Consider each spouse’s investment portfolio as part of a whole. For instance, if both you and your mate contribute to 401(k) plans and IRAs, see how your investment choices match up. Depending on your goals for retirement, one or both of you might want to invest more aggressively. Or you might find that your combined portfolio is more exposed to risk than the two of you can tolerate. Either way, you can rebalance your asset allocation by shifting money from one asset class (stocks, bonds and money market instruments) to another or by adding new money to the underrepresented asset class.

Review documents — Along with other legal documents, remember to update your beneficiaries on life insurance policies, IRAs, employer-sponsored retirement plans and pensions. Also, be sure to either create or modify your wills.

Determine your tax status — Once married, you’ll need to decide whether it’s best to file your taxes jointly or separately. Usually, the “married filing jointly” status results in a lower tax liability, but in some instances — depending on deductions and income earned — “married filing separately” may be more advantageous.

Meet with a professional — Make a date with a qualified financial professional to discuss your financial goals, such as buying a home or investing for retirement. Then, after making sure that all of your financial bases are covered, relax and enjoy the beginning of your life together.

© 2010 Standard & Poor’s Financial Communications. All rights reserved.