Create Financial shows common money mistakes young couples make
Money is usually a distant second to the whirlwind of love. But people in their 20s and 30s are just as prone to financial heartbreak as older couples, and frequently, costly mistakes are setting their financial goals back years.
POOLING GIFTS
More and more, parents are loaning or advancing money to children to help them acquire real estate. But if the couple separates, things often take a nasty turn when the parents want the money back. Otherwise you can have this awful situation of family court litigation against in-laws.
Consider making any cash advance a properly documented loan, not a gift, or take a direct interest in the property (ie, become co-owners). Or if it is a gift, be very specific in writing about who the gift is for.
TOO MUCH TAX FOCUS
When it comes to structuring your wealth for tax avoidance, it might be advisable to steer clear of this. Many people structure their affairs for tax purposes or insolvency reasons. We come across circumstances where we hear, “I put everything in my wife or husband’s name in case I got sued and to lower my tax on investments”, and you have to say, “that’s unfortunate because there could be a very long wait in the family court system”. While there are exceptions and interim measures you can take, the starting point would be you presently own nothing and until that final hearing and a property alteration is made, your wife/husband owns everything.
EYES OFF THE MONEY
The most important advice to a couple is, don’t lose your networks. Your best asset is — and will always be — your capacity for personal exertion or income.
And watch the finances, always. We see circumstances all the time when one spouse controls the finances. It’s important to be across your super, mortgage, investments and general debts, so that you don’t have to play catch-up if things go awry.
IT’S NEVER TOO EARLY TO START PLANNING
Life moves pretty quickly, so it’s never too early to put a plan in place for the future. Seeing a financial adviser can get all of that boring but important stuff out of the way and let you focus on the more pressing, and equally important life stuff.