5 Questions: Rental Income, Couple Credit Scores, Stock Options
- Written by Candice Elliott
You ask and we answer! Today we’ll discuss joint finances, joint credit cards, stock options, credit card debt, and money allocation.
1. How do you update your fiscal strategy when combining finances with a partner? Each person should be contributing but if one makes much more than the other, the contributions should be a percentage rather than split evenly. Opening a joint checking account where each person contributes the agreed on percentage and use this account to pay shared expenses.
2. Should I add my partner who has no credit card to my account or should she get a separate card? If you open a joint card, you each take 50% of the risk. If you add someone to your card, you take 100% of the risk. A joint account also builds the credit score for each of you, important when it comes to one day taking out a mortgage together. That said, unless you are 100% certain not only of staying together but also of the other person’s financial responsibility, keep it separate.
3. My company is giving out mid-year bonuses. Do I take stock options with three years vesting or the cash? Alice’s company is a small start up so it’s not possible to research it. A bird in the hand is worth two in the bush but what if the company is the next Google? What if it’s not? The cash can be invested so in this scenario we say, take the cash.
4. I have credit card debt that I am managing aggressively at 0% interest but I have the cash to pay it off. Should I pay it off or use the cash to invest? As long as the debt is 0% APR, keep your cash in investments. Once the 0% runs out, pull out the cash and pay the debt.
5. My family owns several rental properties. I need help allocating an extra $2000 a month. Invest, put if toward a mortgage on one of the properties, a down payment on the next property, or safely invest in bonds? We suggest investing in bonds and then using that money for the next down payment.
Thanks for the questions guys, keep them coming.
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