Preparing for a wedding takes a great deal of time and organization in order to have the special day go smoothly. The event is a joyous celebration filled with good wishes and blessings for a wonderful future together. Two individuals preparing for life as a married couple need to plan beyond the wedding day. Similar to the merging of two business’s, couples must consider all financial aspects of the decision in order to put together a sound financial plan and solid foundation for a healthy, sustainable financial life.
Healthy finances can surely ease many of the stresses that come with a life together, but for many people, financial struggles will be an ongoing part of life. You will join more than your lives together when you marry. Bank accounts, loans, mortgages and credit card balances will now be the responsibility of two rather than one. In combining two incomes, savings, investments and debts, there will be a mixture of positive and negative affects. To help you avoid a bad situation and the potential for an ugly argument, consider all your options before deciding how to handle your joint money concerns.
By far, money and finance related issues have become the number one reason for friction and potential divorce. Knowing this, the wise couple will discuss their differences in money management styles before they walk down the aisle. Some issues will be easy to resolve, while others will require further compromise. Also, keep in mind that money may buy a new couch or a vacation on the beach, but it can never provide the love and respect you need to have for each other to enjoy a lifelong marriage. Making it work is a process that needs to be done as a team.
Separate or Joint Accounts
There was a time not long ago when this wouldn’t have even been a consideration. Many couples these days consist of both partners working full time before they wed and planning to continue working this way after… separate and/or joint accounts needs to be addressed. Taking the time to consider all accounts ahead of time; savings/checking, investment accounts, credit cards and so on, will help prevent some future blow-ups. You’ll need to look at who will be responsible for each of the household expenses. Another consideration of how you manage your accounts should include the best option for filing taxes.
A joint account will be one large canvas to work from together and may make it easier to clearly see where your money is going and how well you are making progress. On the other hand, separate accounts are beneficial if you’re receiving tuition reimbursements or child support that needs to be managed apart from your household expenses. Situations can vary greatly for different households and individual circumstances…do your homework.
Working Together on Debt
This may be the hardest part of the financial future of engaged or recently married couples. You’ll need to create an agreeable budget between the two of you. The difficulty comes when you try to combine the customs of two people living independently. You’ll both need to be willing to put your shared future ahead of your personal needs.
It’s not unusual for couples to have accumulated debt on their own that will continue to be an obligation after they marry. Much of the troubles with bringing debt into a marriage may begin when one partner carries a much larger amount of debt than the other. Financial experts suggest that when someone has a large amount of debt, they need to work extensively to pay it down as much as possible before they marry.
If you find that your commitment to get out of debt as a couple isn’t working, it’s time to reassess how your behavior may be going against what you hoped to accomplish. You will need to sit down again to rework a budget that is truer to how you are living. One issue that may be part of the problem is that you’re avoiding an honest discussion on how you’re spending money. It’s important to your finances, but even more for your relationship that you never keep secrets. Even a small white lie can derail your relationship.
Planning for the Future
With your whole future ahead of you, it’s easy to fall into complacency about planning and preparing. There’s no time like the present to begin and the sooner you do, the more you will have in retirement. Another big question is, how much risk to take with your investments? For this you’ll need to sit down and discuss your goals and time frames. If that doesn’t work for you, seek the help of a broker or a financial planner. Once you begin to invest, you’ll need to review your plan annually to make sure it continues to meet your projected goals.
Planning for emergencies is another fact of life that is often put on the back burner when a couple gets married. Even with the most successful career and comfortable lifestyle, unexpected situations happened. Being financially prepared will give you peace of mind and help eliminate the potential panic that may otherwise come when you discover you’re woefully unprepared for emergencies. A good rule of thumb is to establish an emergency fund of three to six months’ worth of living expenses.
In conclusion, your life together will be happier when you work as a team, especially in times of hardship. From serious matters like establishing an agreeable budget to what color to paint the kitchen walls, building a rapport in major and minor things will earn the mutual respect of both partners and help insure a long, happy life.