Getting married is a significant life change. You’ll want to think about your plans for the future together. Well-honed financial goals are the foundation of any good marriage. These tips are easy to follow and will set you on the path to a tremendous joint financial future.
#1: Talk About Budget as a Team Effort
One of the first things you should do is talk about your budget. Set up a list of your expenses, including everything from housing costs to how much you’re spending on lunch. Allow each partner some leeway, but try to stick to the overall budget.
#2: Talk About Your Financial History
Most people have a financial history before they get married today. Now is the time to reveal that history to the person you’re going to marry. Each party to the marriage should know about the other’s credit score and any previous debts and assets they bring the marriage before heading down the aisle.
#3: Talk About Your Educational Plans
If you haven’t completed your educational plans, tell your partner. You might have a bachelor’s degree in literature when you really want a master’s degree in library science. Maybe one of you wants to go to medical school. Now is the time to make future educational plans clear before you make any further moves.
#4: Talk About Life Insurance
Insurance is there to provide for you in the event of an emergency. As a young couple or a newly married couple, you might be wondering how much life insurance do I need. Many employers offer a basic policy that includes a year’s salary. If you face specific circumstances such as prior dependents or lots of expenses, find out if you can increase the amount. That offers more protection at less cost.
#5: Get Started Retirement Planning Now
It’s never too early to begin planning for retirement. Getting married offers the perfect time to examine your finances and think about where you’re headed right now. You should ideally agree with each other about your plans for retirement.
#6: Talk About Where You’re Going to Live
Your first home together is not necessarily where you intend to live five years from now. Have a discussion about where you want to live in the future. You might be dreaming of a cottage by a lake. Meanwhile, he’s into a pied-a-terre in the city. It would help if you told each other this before you get married. You can always make compromises that satisfy both parties, such as living in the center of a small town with a lake in the backyard.
#7: Talk About an Emergency Fund
Let’s face it. Emergencies happen. One day the car breaks down. Next, you need to bring the dog to the vet. Now is the time to start an emergency fund if you don’t have one in place already. The ideal emergency fund has at least three months of living expenses in a safe place, such as a CD. Many people find it best to add another three months just in case something big goes wrong. This way, they’re prepared for anything.
#8: Talk About the Distant Future
In the rush of a marriage, it’s important not to lose sight of the coming years. Even if you’re marrying past the average marriage age, chances are you’re going to have plenty of time together. Now is the time to make plans at reasonable intervals. For example, think about what you hope to accomplish after the first year of your marriage. You might want to aim for a certain amount of funds in the bank, a promotion at work, or enough money for a down payment on a house. As the years go by, you’ll want to examine these plans in detail. See what goals you’re meeting and objectives you might need to work on further.
#9: Talk About Your Bank Accounts
Your bank accounts play a major role in the management of your finances. Think about the kind of banking plans that are going to work best. You might want to opt for a joint bank account. That can simplify your record-keeping and make it easier to see where the money’s going. However, it can also be useful to have separate accounts to allow each partner certain financial flexibility.