Times are a ‘changin goes the old folk song. And for Lesbian, Gay, Bisexual, and Transgender couples in the Capital District, change means progress and a need to build a sound financial house.
Marriage equality is the law in New York State, and likely nationwide later this year. But the law doesn’t overcome human flaws and prejudices that may tamp down full implementation of new laws. And regardless, heterosexual married couples have long known certain steps are necessary, regardless of the protections of marriage. For an especially marginalized group, learning the basics of money and how it works may well have been ignored in light of more pressing personal issues
Gay couples in a relationship need to build their financial security with these steps:
- Get legal protection, in the form of airtight wills, power of attorneys, living trusts and proper amounts of life insurance. We all know our birth date…we just don’t know our last day. Protecting your spouse and children is a moral obligation.
- Monitor taxes. Married couples have some tax advantages, and disadvantages, that need to be explored with a professional. But one critical step can be taken regardless of circumstances: Don’t overpay your taxes, i.e., don’t get a tax refund. Use the money to invest in your future your children’s education, your retirement.
- Become an owner, not a loaner. That is to say, bypass the banks, the insurance companies, the government and invest for your future. Learn about 529 College Savings plans, Roth IRAs, mutual funds. Get a good return on your money…it’s the only way to build a future.
- Tackle debt. No issue poses more of a threat to family finances than crippling debt, from student loans, credit cards, mortgages. Consumer groups are helping to fight back against the “debt industry.”
- Build an emergency fund for a rainy day, and to keep you from using a credit card with high interest rates. Use credit cards for convenience only and pay off balances each month.
And lastly, dream. Your new lives will be hectic, busy, and fulfilling. But take time to cement your relationship with plans for a home, a vacation…things that will bring you, your spouse, and your family happiness.
There’s a saying that “Money can’t buy happiness, but just try living without it.” Or, “Blood is thicker than water, but money is thicker than blood.” Much has changed in just the last 30 years. The three-legged “retirement stool of social security, pensions, and savings is now down, essentially, to one “leg,” savings. We have to become knowledgeable about how our money grows, as the costs of college tuition soars, inflation keeps growing, and taxes always seem to rise. Don’t let these factors diminish your paycheck, your hard-earned money, to the wind. And don’t delay. There is a high financial cost to waiting and legal protections need to be implemented right away, because you can’t go back and fix that in the event of a tragedy.
Dave Balog teaches financial basics to Capital Region families. email@example.com.