Financial checklist for couples about to get married
Marriages are probably made in heaven, but financial compatibility is to be worked upon on Earth. Julie Murphy Casserly, the author of The Emotion Behind Money writes, “Finances have long been a trouble area in marriage and the current economic crisis is stretching even more people to the emotional breaking point.” While finances may not be the sole reason for a marriage falling apart, most successful marriages are built on solid financial collaboration. This marriage season, make sure to evaluate each other’s financial habits and step into the new season of your life.
- Discuss income and spending habits
Do not shy away from having the money conversation. Knowing your partner’s income helps you get an idea about their spending habits and financial goals. If they have multiple income sources, it mirrors their perspective on income. If you are into investing a quarter of your income, while your partner is a compulsive shopaholic, there will inevitably be conflicts. Discussing your income and spending habits with your partner is the best way to build trust and understand your financial compatibility.
- Evaluate financial goals
It is always better to plan ahead than fumble around in a tough spot. You must discuss the prospect of maintaining an emergency fund to turn to in case of emergencies. How much of their income are they willing to put towards it? It is best to discuss such things before beginning a life together. Also, your retirement goals may be different from your partner. It is important to check in with your partner regarding such matters.
- Do not go overboard with wedding expenses
Big fat Indian weddings come with a hefty check. Plan your wedding expenses with your partner and ensure that none of you goes overboard. Your financial goals may differ from your partner, but you can collaborate with your partner and work on your individual goals as well. To support your ideal wedding day financially, you can also apply for a personal loan, after checking the best options at Andromeda.
- Take it easy with credit cards
The golden rule of never going broke is to remember that credit cards offer money that you do not have. Be mindful of the purchases you are making with credit cards. Debt, no matter if it is taken from friends, family, or financial institutions, takes time to pay off. This may impact your quality of living in the long run.
- Invest in insurance
Once you have tied the knot, you must invest in some life insurance policies. Incidents do not take long to become accidents. Marriage is a partnership, hence now you will be responsible for each other’s financial well-being. If any of you ever fall ill, or your house gets damaged due to natural disasters, or your car gets dented in an accident, insurance will save your back.
- Maintain both individual and joint financial accounts
While marriage is a collaboration, you can maintain separate bank accounts and still live a happy life. In fact, it is recommended that you maintain separate accounts, as well as a joint account. To buy some new furniture, you can withdraw money from the joint account, while for individual purchases, you can use your own income. It causes less friction for you do not have to cut corners to buy something you want.
- Make sure to communicate about credit card and installment debts
Make sure to share your financial past with your partner. Try to pay off as much as possible before you begin a new chapter of your life. Your partner should not have to bear the brunt of your past mistakes. If you are prone to purchasing items on credit cards, tell your partner. You can maintain a spreadsheet to track your expenses.
- Consider a pre-nuptial agreement
Not your idea of an ideal romance but consider getting a pre-nuptial agreement with your partner. It is a written contract that states which one of you will be getting ownership of your assets in the event of a divorce. It is usually done by people who have expensive goods or a lump sum amount of family inheritance, however, ordinary couples can also draw up a pre-nuptial agreement to divide their existing assets in case things go south.
- Address future prospects like children
Children are probably the costliest addition to any marriage. Make sure to discuss if your partner wants children, and plan your expenses accordingly. It is difficult to raise children without a dual-income household. If you or your partner plans to become a stay-at-home parent, make sure to save in advance.
- Review and update accounts after marriage
After the honeymoon phase, make sure to update your new name (if you have chosen to take your spouse’s surname), new address, and other information in your accounts. Update your retirement plan and insurance beneficiaries. Not all couples enter marriage with a bullseye view of what kind of lives they want to lead. It is important to establish a bond of trust between yourselves so that your relationship remains steady as your priorities shift.
Tying it all together
Financial infidelity may be the newest nightmare for couples. To prevent such mishaps, it is very important to understand your partner’s financial past and their money triggers. Like most things in life, communication is the key to understanding your partner’s financial goals and habits and making even your financial union work.
