You've met the love of your life and are planning on
marriage, but you both must be open to talking about finances.
Money can be a touchy subject with even long-married couples, but discussing
your finances and how you will be handling them is an important step to take
before saying, "I do". Consider these six crucial steps with your
future spouse:
Clear The Air
Now's the time to discuss your debts - how much you owe and
why. Whether you owe $25,000 in student loans or $2,000 in credit card debt,
you owe it to your partner and impending marriage to let them know what your
financial obligations are, because once you're married, your financial
obligations will be shared by both of you.
This conversation is also the perfect opening for discussing
your credit history and credit score. Again, your financial endeavors will
affect both of you, and the decisions you make together -- such as purchasing a
car or a house -- so you must be both aware of finances and
credit scores.
Plan For The Past -- And The Future
Discuss how any current or potential family situations, such
as an ailing parent, might affect your life. Elderly or ailing parents might
not have the financial ability to provide for themselves in the long term, which
will put you and your spouse in the position of having to help them. Also, talk
about having children, and that financial impact. From health insurance to
elementary school field trips to college tuition, children never stop costing
money, so now's a good time to talk about potential plans for them.
Combine Finances
Go over living expenses and all utility bills, and decide
who will pay them and how. Make and trim your budget however you mutually agree
to, but if you run into a disagreement over how to handle a particular
financial obligation, such as the premium cable television subscription you
don't think is necessary or the gym membership your significant other argues
that you don't even really use, consider taking a financial counseling class,
where you'll both learn better money management and general saving skills.
Set Up A Joint Bank Account
Even if you combine living expenses and have both of your
names on all bills, you may still decide to keep separate bank accounts for
paychecks and other deposits and transactions. This is fine, but you should
ideally set up a joint back account that you will both make regular
contributions to. This is an excellent way to establish a dedicated fund for
home expenses, a down payment for a vehicle, or simply a dedicated savings
account.
Avoid Debt
This sounds like an obvious rule, but your engagement and
period of wedding planning can be very tempting times in terms of your tendency
to want to indulge - and over-indulge. Set spending limits and adhere to a
budget for your wedding say the professionals from Kelsos. The Law Firm recommends making
sure that both of you are on the same page with these limits.
Get A Prenup
If one or both of you have substantial assets or a business
or piece of property that is valuable and worth protecting, consider a
prenuptial agreement. Prenups aren't just for celebrities - they're for any
couple who is realistic enough to understand that even the best relationships
and marriages can break down. Prenups protect you both, and can often give you
a better perspective on your finances.
In conclusion, addressing financial matters with your future spouse is essential for a harmonious and secure marriage. By following these six crucial steps, you can lay a solid foundation for your financial partnership. Begin by clearing the air about your debts and credit histories, ensuring transparency and mutual understanding. Plan for both present and future family obligations, including potential elder care and the costs of raising children.
Combining finances and setting up a joint bank account can streamline your budgeting process and ensure that shared expenses are managed efficiently. To avoid unnecessary debt, particularly during the engagement and wedding planning phase, set spending limits and adhere to them, reinforcing good financial habits. Additionally, consider taking financial counseling classes if disagreements arise, as these can provide valuable money management skills.
Lastly, protect significant assets with a prenuptial agreement if necessary. This pragmatic approach ensures that both parties are safeguarded, and it encourages a deeper understanding of each other’s financial perspectives. By tackling these financial steps together, you not only prepare for the logistical aspects of married life but also build trust and cooperation, setting the stage for a financially stable and successful partnership.
