Money and marriage – it’s an awkward combination, especially if you are only beginning to discuss your finances after getting married. Talking about money can be a tricky business, especially if you have some financial skeletons in your closet you’d prefer your sweetheart not to know about. Yet, it is essential for couples to work out their financial future together.
Getting on the same page regarding your marital budget, shared or separate finances, and pasts debts will help you grow together as a couple. It will also help boost communication in your marriage.
Financial planning for married couples is an important business that should definitely be given your shared attention, even if you are not entirely comfortable talking about it. Here are 6 tips for talking about money with your spouse.
Communicate about Money Matters
One of the key components of financial planning for married couples is to communicate openly about money matters. Do you know how your spouse feels about working, spending, saving, and handling debts? As a newly married couple, you should have clear conversations about:
- Past debts that are still being paid off
- Whether or not you will sign a prenup
- Life insurance policies
- Whether one or both of you will be working to support the household
- What your financial goals are regarding starting a family
- How bills will be separated
It is wise for couples to talk about money matters before they get married. This way they can get on the same page about how to handle income. It also ensures that you and your sweetheart will help avoid those awkward ‘overspending’ conversations or getting into arguments about your finances.
Separate Bank Accounts Vs. Shared
One part of financial planning for married couples is to decide how your money will or won’t be shared after you are married. Will you be sharing a bank account or maintaining your financial independence?
There are many pros and cons to each. For example, keeping your accounts separate means you won’t have to put much effort into changing your financial status once you are married. It also eliminates the potential for overdrawing from the same account.
A shared bank account also has benefits. In one-income households, a shared bank account gives the non-working spouse access to finances when they need it.
Couples sharing their funds simplify legal procedures by having access to the same account, such as if one spouse should pass away. Some may also find it easier to track outgoing payments and contributions to the household when the money is coming out of one account.
There are benefits to both options. It is best to discuss honestly with your spouse what option is most comfortable or convenient for your situation.
Create a Budget
This is an essential step for newly married couples. Sit down together and make a list of your monthly expenses such as your mortgage, insurance, car payments, bills, and groceries. This will help you have a better idea of how much you need to reserve for the month.
Many couples find it helpful to put a cap on how monthly spending on such things as groceries, entertainment, and eating out. This will help prevent overspending.
Creating a monthly budget and continually tracking your progress will help couples save money and live within their means. It is also beneficial for one-income households to budget so that they have a clear understanding of exactly what is available for each spouse to spend.
Put Aside an Emergency Fund
Part of financial planning for couples is to expect the unexpected. Whether you and your spouse are the masters of financial planning and budgeting, it is always wise to have an emergency fund just in case.
No couple is free from emergency situations like health problems, natural disasters, or the loss of a job. Unforeseen occurrences befall everyone and there’s no better security than knowing you and your spouse have a nest egg ready for such an occasion.
A great rule of thumb is to plan on saving at least 6-months worth of your household expenses in your emergency fund. Doing so will give you peace of mind should a disaster strike.
Make Investment Decisions Together
There is no “I” in marriage. Now that you are legally bound as a couple, it’s time to start working as a team. This includes your financial lives.
If you have been financially independent for quite some time, this aspect of marriage can come as a shock. However, since both you and your spouse have different strengths when it comes to managing money, making financial decisions together will truly benefit your marriage.
Even if you have chosen to keep separate bank accounts, it is still important for you and your spouse to discuss any large purchases or investment opportunities together. This shows respect for one another and ensures the best outcome possible.
Discuss Long-Term Goals
Financial planning for married couples is about more than just discussing debts and being on the same page about money. It’s about planning for your future.
Get together every year and discuss your short, mid, and long-term goals regarding your lives and your finances. Doing so will help you create and update your annual budget.
This is great for couples who are trying to pay off debts or buy a house together. It’s also a great idea for tracking your emergency savings, finances for starting a family, or travel fund.
Couples who celebrate together have a stronger bond and higher levels of marital satisfaction than those who do not. Regularly discussing finances and celebrating goals that have been reached is a great way to bond with your spouse.
Talking about money isn’t always easy, but it is always worth it. Financial planning for married couples should include deciding how money is to be spent and saved. It should also involve couples openly discussing future investments and the handling of debts. By having these important conversations, you and your spouse will strengthen your marriage.
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