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Financial Tip

Oliver Wendell Holmes, former Justice of the United States Supreme Court, once said, "Taxes are what we pay for a civilized society." Although people work hard to meet their needs and the needs of their families, there are some things they cannot purchase themselves. For example, the taxes paid to state and local jurisdictions help pay for police and fire protection. These taxes also pay for the operation of the local governments, and for local recreation areas such as parks and other public facilities.

On the national level, federal income taxes help pay for defense for the country. They also pay for capital facilities such as highways and other transportation services, and to help those who are poor or ill. These are all services that individual citizens cannot purchase the way they can buy food and clothing and the other necessities of life. When people live together in a society, all of its citizens bear the cost of providing such services. Taxes are the means by which the society raises the money to cover these public costs.

The United States Department of the Treasury has a number of fact sheets that can help people better understand the various taxes imposed in the United States. These include: Economics of Taxation explains how taxes support government services and benefit the country's citizens. Writing and Enacting Tax Legislation explains the process for developing and passing legislation into law.

In addition, Lesson 1.5 of the Yes, You Can Curriculum includes classroom examples of how taxes are collected and used by the various jurisdictions.

Source: Adapted from United States Department of the Treasury.

From Wedding Bells to Babies: Communicating About Money Enhances Wedded Bliss

Before you say "I do!" consider all the do's (and don'ts) that can affect your financial future long after the last piece of cake is eaten.

Ever since your first date, you've been gaining clues on how your partner uses money. The award-winning book, Yes, You Can... Achieve Financial Harmony, suggests that couples discuss their money "ancestry" and how their families treated money. Communicating on money matters will build a strong foundation for your life together. Attitudes learned in childhood will affect the way you handle money as a couple as you build your "nest" and your "nest egg."

"Talk about money before you get married," advises one couple, Sarah and Jeff. "Understand your partner's views about money and their spending patterns."

Wedding Bells & Bills
If marriage is in your future, discuss what the two of you envision as far as a ceremony and honeymoon. Consider what you can afford without going into debt.

Include in those conversations some consideration of the "opportunity costs" of a $25,000 wedding - today's average cost - versus a more intimate ceremony. Is the experience of one day worth the expense? Long-term, would you benefit using some of the money to invest for your future or save for a home?

Whatever size wedding you choose, develop a budget together and look for creative ways to trim costs. By searching online for "how to save on weddings," you'll find dozens of helpful sites such as wikihow.com and moneyallocator.com. Look at your own spending of other ways to save. For example, an evening out that includes dinner and a movie will cost considerably more, than a backyard picnic and movie rental.

Newlyweds & New Challenges
As you settle in together after the wedding, continue building your communications skills. "Live well under your means, and don't get into debt," advises Natalie. "Each partner should take responsibility for their part of the finances."

Decide on your priorities, develop an emergency fund and start saving as much as you can to invest for the long-term while also achieving shorter-term goals such as buying a starter home or starting a family.

And Baby Makes Three
According to a recent study by the U.S. Department of Agriculture, estimated costs for raising a child born in 2010 through age 17 in a middle-income household is $286,860. Given the price tag, couples who are considering becoming parents need to plan ahead. This includes having adequate health insurance coverage, emergency funds and a cash reserve to cover at least the baby's first year of expenses.

Using online calculators, such as those found below, will help you prepare for the welcome addition to your family:

While money can't buy love, building financial security as a couple can give you peace of mind so you can live happily ever after!

Teachable Moments

Newlyweds, as well as teens starting to date, can benefit from finding ways to enjoy together time without spending lots of money. In Yes, You Can... Achieve Financial Harmony, you'll discover many ideas for weekly dates and "together time," including local sightseeing, trying new recipes and volunteering for favorite causes. "It doesn't have to be fancy or expensive," the authors point out. "It just needs to be a time dedicated to the two of you." Download a copy of the book now.