If you’ve recently become engaged, then you know it’s one of the most exciting and intimidating phases of your life! Whether or not you’ve been living together with your significant other, marriage will be a legally-binding contract that marries your finances together. Likely you’ve been responsible for only yourself and never had to share your financial decisions with another person before, but this will change. Finances can be a huge source of disagreements for engaged couples, so follow these tips to help you get through this new phase of life.
Discuss Your Financial Situations
Even if you’ve never openly discussed your finances before with anyone, your partner is not someone to keep secrets from, especially financial secrets! Be upfront about any outstanding debts either of you have incurred. This discussion isn’t about judgment, it’s about building a partnership.
Create a Budget for Your Big Day
One of the first major expenses you’re about to face as a couple is your wedding day. This will also include your first major agreement: how much you plan to budget for the event. Setting the date a ways away also gives you more time to save up. Be financially responsible with your planning and don’t spend what you can’t afford. Even this special occasion isn’t worth setting yourself up with new debts.
If you haven’t been living together yet, marriage is likely to change that. Evenly splitting expenses like rent and utilities is always the fairest approach. Some couples only have one source of income, and that’s okay. What’s important is that couples discuss how they plan to support each other, whether that’s keeping up a home or working.
To Join Accounts Or Not to Join
While the traditional path was for husbands and wives to share joint assets, it’s become much more common for married couples to maintain their own separate accounts. There are pros and cons to both approaches. Joint accounts can create a more clear picture of your total finances, while separate accounts can be better for autonomy and typically keep things simpler if there were a divorce. Some couples opt for both: they maintain their own accounts and also keep a shared one.
Set Goals Together & SAVE
Now that you’re becoming partners for life, your future is in both of your hands. What do you want to do with it? When would you both like to retire? Do you have similar investment strategies? Set plans and try to think about your progress in one year, 5 years, and 10 years from now. Where do you want to be, and how can you get there? Together you can hold each other to your dreams and obligations. Another step may be scheduling an appointment with our team at United Financial.
Clear Away Outstanding Debts
Starting a new life together is the perfect time to clean your slate. Take steps to pay off your outstanding debt if you are able to. If you’re struggling, we have written other articles on the topic of reducing debt you can check out!
Consider Getting Tax Help
Your tax situation may change with your upcoming marriage, including entering a higher tax bracket. This is especially true for couples marrying with kids in the picture. Filing your new taxes with a professional consultant can help you file the correct claims and deductions.
Invest in Life Insurance
Right after marriage is the common time for couples to get serious about getting a life insurance policy. It ensures your partner is covered in the case where something could happen to you. This is especially important for couples with kids who rely on a certain level of income to survive since a loss disrupts incoming cash flow. United Financial is actually in partnership with Preferred First Insurance and can offer our members up to 35% off discounts. Learn more about getting a free quote here.
Keep Open Discussions and Good Luck!
Life is going to throw challenges your way, and emotions will eventually flare. You are in this together, and you’re making a vow to stay together for better or for worse. The biggest piece of advice you should take is to always communicate your thoughts, concerns, dreams, and feelings with your partner. Encourage them to be honest with you too. You don’t want secrets. Take it one day at a time, but plan for the future. Good luck!