It may not be the most romantic Valentine’s Day conversation, but financial planning is an important part of starting your marriage on solid financial footing. After all, married couples fight over personal finances more than they fight over anything else.
Here are some suggestions to put your marriage on a firm financial foundation, help you merge your financial goals, and keep you in wedded bliss:
- Communication and full disclosure. Discuss your views on personal finance, your financial background, your ideas about money and your financial goals. Do not wait until after the “I do’s” to discuss the fact that you have significant credit card or student loan debts or any other skeletons hiding in your personal financial closet.
- Budgeting. You may have your own budget working nicely, and your fiancé may have a sound budget, too. However, you are about to merge two very different spending and saving habits and financial goals. You need build a new budget to set of common spending and saving goals. Like all communication in a relationship, budgeting isn’t just a one-time conversation. Monitor your budget regularly and fix the issues as they arise, before they become serious financial problems.
- Discuss joint bank accounts. While joint accounts may signal a commitment to the marriage, depending on your situation, separate accounts, while seemingly unromantic, may be more practical. It is not imperative that you have joint accounts, only that you agree on the strategy.
- Discuss who is responsible for paying the bills and reconciling the accounts. Even if one person is better with the task of paying the bills and balancing the checkbooks, be sure both partners understand the process and review the financial affairs.
- Plan for emergencies. It is advised that every couple have enough money available to cover three to six months’ worth of living expenses. Discuss each of your current emergency funds and what additions are necessary to get you to a comfortable place. Be sure you have adequate homeowner’s/renter’s, auto, health and life insurance coverage. Discuss your life goals and plan for contingencies.
- Beneficiary designations. Be sure to review your beneficiary designations on your legal documents and contracts such as wills, IRAs and pension plans. This is especially important with blended families. As with budgeting and bill paying, designating beneficiaries isn’t just a one-time discussion. Your designations should be reviewed every few years or when you experience a major life change, such as the birth of a child.
This is only a few ideas to start your financial relationship. There are many books and resources available to married couples with money issues. If you have a financial advisor, contact him or her for help planning for your financial future.