Managing Financial Transitions Alongside Major Life Changes
Life changes, such as getting married, divorced, having a child, or facing widowhood, require more than the subsequent emotional adjustment. These milestones also signal the need to review your financial situation and make any necessary adjustments.
- Discuss your financial goals with each other — Do you want to save for a new house? Have kids? Decide if you’re going to pool your assets or maintain separate share draft/checking or savings accounts.
- Review your credit histories — Order your credit reports and clean up any credit problems.
- Make name change notifications — If you’re changing your name, notify your employer, credit card issuers, the Social Security Administration, the motor vehicle department, the U.S. Passport Office, as well as insurers and doctors.
- Create or update your wills and powers of attorney.
- Check your insurance — Review your auto, health, property, disability, personal liability, and life insurance coverage. Update beneficiaries on your policies, your IRAs (individual retirement accounts), and other investments.
Expecting a new baby (birth or adoption)
- Evaluate your budget — If you’re planning on moving, buying a bigger car, or want to quit work to raise the baby, you’ll need to create a budget to help you determine how to manage it financially.
- Insurance coverage — Visit your employee benefits department to find out what your policy covers, and when to add a new baby or adopted child to your policy. Research any other employment policies regarding maternity or family leave, and flex-spending accounts.
- Create or update your wills — Besides instructions about how the estate should be distributed, wills should include the name of the person chosen to be the child’s guardian. Parents may also wish to appoint a different person to be the guardian of the child’s money.
- Educate yourself — Review financial accounts and figure out where the money is. Pull credit reports to see if there are any credit cards or loans you don’t know about.
- Collect information — Before your first visit to an attorney, make copies of all financial records, including statements from financial institutions and brokerage companies, tax returns for the past two or three years, mortgage, copies of financial statements on file at any financial institutions, insurance, safe deposit boxes, wills, and trusts.
- Establish credit — Open a White River Credit Union share draft/checking and savings account in your own name. Get a credit card in your own name.
- Update wills and beneficiaries – After a divorce, it’s crucial to update your will to reflect any changes in beneficiaries or assets. Updating powers of attorney and trusts will help ensure your wishes are followed in case of death or serious injury.
- Close joint credit accounts — Debt incurred in a joint account will follow both spouses after the divorce. Talk to your lawyer about how to best close joint accounts and limit your liability.
- Get health insurance — If you have insurance through your spouse’s employment, you’ll still be covered during the separation, but once you’re divorced, you’ll need to get your own health insurance.
Death of a spouse or parent
- Get 10 death certificates — You’ll need copies for your insurance, 401(k) payouts, Social Security, probate, and to change the title on any property.
- Organize finances — Make a list of assets and liabilities. Gather statements from financial institutions and brokerage companies, insurance policies, employment records, tax returns, and so forth.
- Cancel accounts and services — Check for and cancel any automatic or online bill pay services unless you’ll continue to use them. Notify and cancel any accounts with health clubs, magazine subscriptions, online services, and more that you won’t be using.
- Contact income providers — Notify previous employers, pension fund administrators, and financial institutions holding IRAs or other retirement income accounts. Each may have a different beneficiary. Notify the Social Security Administration as soon as possible.
- Contact life and health insurance providers — Insurance companies will distribute money to the beneficiary listed on the policy. Don’t cancel health insurance until all outstanding bills have been paid.
Contact WRCU After Major Life Change
Going through a major life change can be tough, but managing your finances doesn’t have to be. At White River Credit Union, we understand that every life change comes with unique financial challenges. That’s why we’re here to help you navigate those challenges and come up with a game plan.
Whether you’re getting married, having a child, facing a divorce, or dealing with the death of a loved one, we’re here to help you take control of your finances and make the most of your new reality. To get started, give us a call at (360) 825-4833 or stop by our branch on Garrett St. with a member of our friendly team. We’ll help you take the first steps toward a brighter financial future.