We all know weddings can be expensive and many couples focus on how to make their finances work for that biggest of big days. However, couples can't forget to consider their financial future as a married couple. Once the wedding is over the real work begins.
Don't fret! Talking about money can be hard and scary at first, but with open, honest communication you and your spouse-to-be can learn to budget together as if you're running a bank.
Here are four tips to help make your marriage a financial success:
1. Ask family and friends to contribute your financial goals. This may sound obnoxious and rude, but in reality, it’s not. Your loved ones often find cash gifts more personal than a blender or toaster. And given the economy, they want to contribute to your long-term financial success. Asking for money can feel kind of tacky, but creating a registry that asks givers to contribute to life events, like the ones on presentvalue.com, can take some of the awkwardness out of it. You can set a goal for investments like the down payment on a house or help in paying off your student loans. Your family can set you up for success and you don't have to feel like you're charging people to attend your wedding.
2. Keep separate bank accounts and create one joint account. By starting the money conversation with, “let’s open a joint bank account,” you’re laying your financial cards on the trust table. Together, you’ll figure out how it will work as you combine your two lives. For example, along with depositing your cash wedding gifts, you may each contribute a set amount from every paycheck, and use the balance to pay joint housing bills. It’s also a good idea to have money in separate accounts. This will allow each of you the freedom to spend without the pressure of those funds having an impact on your joint finances. Plus you don't have to use the "our money" pot to pay for your spouse's Christmas present. This mint.com article offers a few options on combining (and/or not combining) incomes.
3. Handle debt as a couple. It is important to have the conversation about debt as far in advance as possible. Even if only one of you has debt, it will very likely impact your bottom line as a couple. If you’re planning to make a major purchase, like a house or a car, your debt will play a significant factor in determining if you can get a mortgage or car loan. Figuring out a plan together will not only help pay off the actual debt, but it will work to keep a healthy relationship as a married couple. (Zillow has a pretty handy calculator on how to figure your debt-to-income ratio - especially if you're looking to buy a house.)
4. Don’t keep any financial secrets. This concept may sound simple but, surprisingly, many couples keep money secrets. The sad reality is that finances can easily become a major stressor in a relationship and is often the cause for divorce. By keeping the money talks open and honest, you’re building a solid foundation from this day forward!
How do you and your fiancé discuss finances? What tips would you give to other couples?
Thanks to Michael Levenson and crew at presentvalue.com for these excellent tips on managing finances!