4. Know your net worth
No mystery here -- your net worth is simply what you own less what you owe. Anderson recommends sitting down once a year and listing all your assets: bank accounts, the house and cottage and their contents, vehicles, any investments, RRSPs, pensions or rental properties and so on. Then do the same for liabilities: mortgages, car loans, credit-card debt and anything else.
The difference between the two is your net worth. "From year to year you want that net worth or bottom line to grow," she says. "This gives you a snapshot of where you are and a starting point to figure out what needs to be done. The only way to improve on it is to add to your assets or reduce your liabilities."
5. Check your credit rating
"With the increased incidence of identity theft, this is an area we should all take more active interest in," says Lermitte. The standard system ranks credit worthiness on a scale from one (pays within 30 days) to nine (bad debt placed for collection). If there are errors (it's not unusual) on your credit report, you could be denied a loan or miss out on a job or a great apartment. A common mistake is confusing a John Jr. with a John Sr. If one of you is a deadbeat when it comes to debt repayment, the other could pay the price. To correct a mistake, contact one of the major credit bureaus and fill out the appropriate form.
In Canada, there are three credit bureaus: Equifax Canada, Trans Union Canada and Northern Credit Bureaus. Equifax and Trans Union are the largest; most national and international creditors are registered with both. Whatever shows up on one credit report will likely show up on the other, saving you the hassle of contacting all three (Equifax is the most accessible). You can check your credit rating by mail once a year at no cost.
Freedman also advises everyone to establish a separate credit rating. "Some people are in a relationship from early on and end up with joint credit cards. If the marriage breaks down or one spouse dies, the other has no credit rating," she says. "Trying to establish credit later in life can be difficult. Do it before you need to."
6. Purchase appropriate insurance
It's important for couples to have both life and disability insurance. "For most people term life insurance makes the most sense," says Freedman, coauthor with Marie Howes of Hit by an Iceberg: Coping with Disability in Mid-Career (Trafford, 2003). "Consider how much the other spouse would need to maintain your current lifestyle and whether that will need to continue long term." Disability insurance is equally important for couples: "If you don't have any group coverage through work, look into getting some individually. It's much cheaper to do this when you are younger."
Consider that your needs change throughout your lives, talk to a knowledgeable insurance agent, do your homework and shop around. "The only way to get the best value is to know what's out there," says Freedman. Make sure both of you know what your policies cover.
7. Organize your important paperwork
Keep all your legal documents -- signed wills, powers of attorney, marriage licence, birth certificates, insurance policies, passports, social insurance cards (don't carry these around, they are the key to your identity), property deeds and so on -- together in one easily accessible spot. "A safety-deposit box isn't always the best idea," says Freedman, who keeps her important papers in a lockbox. "Unless it's registered in both your names, you could have a hard time getting access."
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