Chapter 17, Problem 6DC1

Summary Introduction

To determine:

Issues to be discussed for having joint or separate accounts or credit cards and heir importance before marriage.

Introduction:

Ten important events of life of an individual can include the following:

• Starting of financial life:

This is the commencement of financial future. It includes the future planning and designing the layout of life.

• Marriage:

Life could already be having loans at this point of time. Marrying means carrying their loans too. Hence the planning of payments of these loans is important.

• Having a child:

New family member increase the expenditure of home and to overcome those financial planning is important.

• Buying a home:

It is an important life event to reside in our own home, which involves a huge investment and hence the planning for the same is important.

• Unexpected money, inheritances etc:

These types of events bring extra tax liability. Thus planning for taxes has to done to overcome these events.

• Illness:

Planning of finances has to be done for the contingencies like serious illness which can come at anytime in the life.

• Death of spouse:

This event makes an individual alone. Planning of finance is important and could help the other partner to come out of this trauma.

• Taking care of elderly individuals:

The planning of health and the expenses for medical treatment of individual’s parents has to be planned in advance.

• Divorce:

This is another traumatic event which can happen in an individual’s life and one should be prepared financially for it.

• Retirement:

Pension plans and retirement plans should be made ahead of life so the life after retirement can be spent peacefully.