In the event of a divorce it’s 50/50 so maybe just divide it by 2.

Our goals, however, are always joint.

Here’s a quick look at some of the posts that caught my eye over the past week…

JLP talks about how to buy an exchange traded fund (ETF).
FMF talks about whether parents or kids should pay for college. It’s an interesting question, …

When we calculate our net worth, it’s both of our numbers together. IMO, it wouldn’t make much sense to calculate them separately because so much would be different if we were still entirely individual entities.

Some people are forgetting though that just because you’re married does not mean your finances are all tied together (even if you try to make them that way). If you have any loans, especially student loans, they most likely will stay under your name unless you decide to change that. I would suggest not doing that, because if something unfortunate happens, then one person can be stuck with all of the debt, rather than just their own.

As for goals, I think it’s best to start anew with new ideas. Its a lot more complex now than it was before since now you have two incomes, but also more expenses, possibiliy of children, travel, etc.

In fact, my situation is surprisingly similar to 2mil. It’s kind of fun to see that there are others going through the same things. I too am not so sure exactly how we will merge everything, but when I calculated my goals a while back I knew that I would probably get married at some point and have a couple of kids. As a result, our plans don’t really have to change all that much.
To answer your questions, here’s what I’m doing now:
1. calculating each one seperate. My wife-to-be likes knowing where she stands because my current net worth would skew the combined results. Plus she likes to know that we are both contributing to the end goal.
2. I didn’t have to (yet), but I don’t she why you wouldn’t want to. We agreed that my plan was good for the time being and we would revisit it as major life changes occur.
3. I use Excel, but have heard good things about MS Money

On another note, saving for the wedding has been (so far) suprisingly easy. We both maintain seperate checking accounts. Then a predetemined amount is transferred into the joint checking for household bills. After that we each maintain a seperate savings account (both at HSBC) that a certian $ amount is transferred in weekly. I had to really push her to get this set up, but now she can see the importance of it.

A note of interest, have you seen the bonuses Goldman Sachs is handing out to its Patnership Managing Directors. They have just announced 116 new ones, and they should expect to receive $9 Million each.

(1) simply add together our funds and keep my prior financial goals the same

or

(2) add together our funds and CHANGE my prior financial goals

I opted for option number two because it gave my fiance and I the chance to sit down and find out “what” our goals really were. I had my own ideas when it came to future financial goals and my fiance, although having similar goals, had a few that I did not expect.

There was a commercial I saw a few weeks back from Ameriprise Financial that talked about their “Dream Book.” Instead of calling it a “401K Book”, their company has been trying to shift the thinking of individuals to plan our their “Dreams” versus their “401K/Retirement Balances”. My fiance (now wife) really latched onto this idea and began coming up with her own “Dreams” that meet her vision of retirement. This also got me thinking about what I want my retirement to be and what types of things I want accomplish.

The end-result was that both of us were able to agree on several goals — and therefore my prior financial goals were “updated” to include the goals that both of us have.

-N.W.
http://www.networthchallenge.com

I think at the begining, you may want your fiancee to do her part of the calculation of her investment/retirement and talk with her about your common goals (short term, long term), then once you two have an agreement on goals, you can combine your assets and liabilities and work out a plan on how to achieve them.

I also use Quicken to track almost everything.

Yes. Unless you get divorced, you’re considered one unit from most financial perspectives–taxes, debts, major purchases, budgeting, etc. are most likely going to be joint decisions and responsibilities, and your retirement is going to pay for both of your expenses, right?

2. Should I restate my goals?

Personally I think even your upwardly revised 1.5 million net worth goal for retirement is low, but I don’t have any detailed knowledge of your expected budget during retirement so I could be wrong. If I were retired, even at age 45, I’d want enough put away so that I could have it invested in very safe investments so that I could pretty much count on the returns not fluctuating too much (and not having the asset value decrease significantly). To me that means probably a 50/50 mix of stocks and fixed income, so probably a rate of return of 8% overall, and I’d want that 8% to cover both my income needs and enough asset appreciation to cover inflation–if you’re retiring at age 45, you’ve probably got 40 years to pay for, so I wouldn’t want much risk of having the money run out before the end.

Being married does change the numbers. It also brings up the question of kids, which if you’re even entertaining the possibility, throw your numbers out the window and start over.

3. What personal finance tracking software should I use?

I like Quicken, and would generally recommend that type of software to anyone who wants to track their finances in detail. I would add that my wife has made fun of me for tracking every dime in Quicken, but what I like about it is how it makes that level of tracking so much easier to do, and that as long as I keep it up to date I can look at all the reports and graphs I might want whenever I feel like it. I can’t imagine having to balance checkbooks by hand, and I like being able to reconcile credit card, mortgage, and other accounts to my own records without a ton of work. I haven’t used MS Money, but I imagine it’s similar enough that it won’t matter which one you choose.

Plus your individual goals really don’t matter now that you are/will be married. You are a team now and your financial success depends on the progress both of you make, not just one of you. Plus if treating some money as your money and some money as her money can tend to lead to problems, IMHO it’s best to lump and treat everything as your families money.

YMMV

Best of luck

MFJ