The Credit Professional Winter 2018 Dec_2018_magazine | Page 31

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Your best approach is for
each of you to have a
retirement account.
Each one of you should jump
into a retirement account on
your own. If you have a plan at
your workplace that offers
matching funds, use that plan.
Otherwise, open up a Roth IRA
for yourself and start saving.
I’m taking on a higher
percentage of the parenting
burden than I once did, but in
a year or two she’s going to be
in amazing career shape.
changes occur. Because they
will occur.
#7: Start an emergency fund.
Now. You’ll never regret it.
In a year or two, I’m strongly
considering going back to
school for a masters degree
myself, likely in my spare time
as I continue to write for
The Simple Dollar.
First of all, what exactly is an
emergency fund? It’s simply
cash put aside, usually in a
savings account, for life
emergencies. An emergency
fund can step up during a job
You should each be targeting
loss, during a car breakdown,
a savings goal of 10% of your
In each case, one partner’s
during a family emergency, or
individual income in your
career situation changed the
for almost anything else that
individual plans, wherever they relative financial burdens (and comes along unexpectedly and
may be. If you do that and you other burdens) in our marriage. demands money.
start before age 35 or so, you’ll It happens. Sometimes your
both be fine in retirement,
partner will go through a
Why not use a credit card? The
whether it’s together
challenging employment patch. biggest reason is that many
or separate.
Maybe your partner will want
emergencies make a credit
to go back to school. Maybe
card no longer useful. Identity
#6: There will come a time
you will want to be a
theft. A stolen wallet. A bank
where you will likely support stay-at-home parent for a while, canceling your card or
your spouse for some reason or to homeschool, or something reducing your credit limit.
or another. Come to terms
else entirely.
Those things can be real
with that (and plan for it a
emergencies and a credit card
bit, too).
It’s going to happen. Don’t be
won’t help you. Cash is king.
frustrated by it. Be glad that
Cash will get you through.
In 2008, when I made the
you can be there for your
decision to go full time working partner when changes happen, So, start building one. Set up
on The Simple Dollar, my wife
and be glad that your partner
a savings account with both of
and I knew there was a risk
will be there for you when those your names on the account—
that it would fail and, in that
ideally at a bank that isn’t your
situation, she would be the
normal bank so that it’s a little
primary provider for the family
bit harder to access on the spur
for a while. Thankfully, the site
of the moment—and set up an
took off so that didn’t happen.
automatic transfer into that
savings account. Make sure it’s
In 2010, my wife took most of a
not incredibly easy to get into
year off thanks to the Family
that account—you should be
Medical Leave Act, meaning she
able to access it, but not at a
spent most of a year without
moment’s notice with a card in
pay. I paid for our health care
your wallet. That keeps you
with my income and we just
from tapping it in a moment
lived pretty lean for a while.
of temptation.
In 2014, my wife started
working toward her masters
degree, taking classes on the
weekends and summers and
on some weeknights. It’s a little
expensive and it means that
The account will slowly grow
over time. Just leave it alone.
Use it only when you need it.
With an emergency fund, an
unexpected problem won’t turn
Continued on page 31
The Credit Professional
30
December 2018