Family Finances

Frequently Asked Questions

• How do you combine finances after marriage?

  When you get married, it is important to understand how household finances will work in your relationship. That means you need to have several conversations about where both of you stand financially, and decide to combine or coordinate your new household’s accounts and debt. The first step in that process is to review both of your credit reports and identify your strengths and weaknesses, such as a history of late payments or outstanding debt. Next, you and your spouse should list all sources of income and expenses. Take a stern look at this and  make a plan. There are many strategies for combining finances, and no matter which one you choose, it’s important to agree on a joint budget and decide who is going to pay for what.
  

  Learn More: 3 Methods for Combining Finances as a Couple
• How much does having a kid cost?

  The U.S. Department of Agriculture (USDA) projects that it costs more than $233,610 to raise a child from birth through age 17. Plus, if you choose to pay for your child’s college education, that adds another $35,331, on average, per year. Generally, though, the average costs can also fluctuate depending on the family, as well as factors like choosing to adopt, work with a surrogate, or whether or not the child is being raised in a single-parent household.
  

  Learn More: Can You Afford To Become a Parent?
• What is the average cost of divorce?

  The cost of divorce will depend on several factors, including the individuals involved, the assets the couple shared together, and whether or not you choose to get a lawyer involved. Generally, the average cost of divorce in the U.S. can be around $15,000, but can also be lower or higher in some cases too. When it comes to court proceedings, in most states, you will have to file the divorce with the court, and that tends to come with a fee between $100 to over $400. Additional court fees bring the total cost (not including cost of mediation or lawyer fee) to approximately $925.

  Learn More: Should You Intentionally Delay Your Divorce Until the Economy Recovers?
• How much do you need to save for your kids' college education?

  How much you need to save for your kids’ college education depends on when you start saving, how much of the total you are willing to pay, and where your child ends up going to college. Fidelity has a rule of thumb that you can follow. It assumes that, if college costs continue to grow at 2.5% above inflation and your child starts college at 18, choosing to graduate in a four-year period, then you should aim to save approximately $2,000 multiplied by your child’s current age. The formula also assumes that you will be paying approximately 50% of college costs from savings. Remember, though, every family has a different savings goal and a plan to get there. One way to save funds from when your child is very young is investing in a 529 savings plan.

  Learn More: How to Finance Your Child’s College Education