Getting married can be a big adjustment for you and your spouse. Whether you’re combining your finances, splitting the bills or maintaining completely separate finances, getting married requires a good amount of planning. It is interesting because when individuals go from a “me” to a “we” situation, they no longer are simply considering their own personal goals, but also the goals of their spouse and how they see their family developing throughout life. So todays focus will be on a few key financial areas every couple needs to consider when getting married.
What you’ll learn in today’s episode:
1) Communication. Having an open dialogue with your spouse is key to having a healthy long-term relationship. Based on industry studies, financial issues are one of the main reasons why people end up getting divorced. How can you minimize this potential issue? Try sitting down with your spouse on a monthly basis to evaluate the household finances. Go over your budget together and get on the same page with each other. Don’t forget to allow yourself some time to dream together. Talk about what you want life to look like 5, 10 and 20 years from now so you are both working toward the same goals.
2) Simplify your finances. Take a look at your personal finances and find ways to make your monthly obligations less of a burden. If you have debt, look at what kind of debt you are carrying and try to find ways to cut the fat. Sometimes you can decrease your monthly obligations by simply making a few short-term adjustments such as: paying of credit cards, not buying that new car, eliminating student loan debt. Paying off debts early in your relationship will make life much easier when you go to work on more long-term goals like: buying a house, having children and saving for retirement.
3) Work toward your goals. Creating a savings plan may be difficult in the early years of your marriage, but starting early will help you accomplish your long-term goals with much more ease than if you were to wait a few years. Compound interest is a beautiful tool, it can help you get your money working for you sooner rather than later. Start simple, if you don’t have an emergency fund of 3-6 months start saving toward that first. Look at your employer benefits; if you have a retirement plan through work take advantage of it. Start by setting aside a small amount of money to capture the company match. Try to keep in mind that you will want to have some flexibility down the road so don’t put all of your money simply towards retirement. Your personal goals may mean purchasing a home in 5-10 years, or having a child in 2-3 years. Try to diversify your savings so you can accomplish your short-term and long-term goals.
Getting married is an exciting time in your life full of hopes and dreams. Make sure you and your spouse are on the same page with what each other wants out of life, and don’t procrastinate in beginning the process of working on your financial plan. If you haven’t thought about working with a financial planner then consider it. Having a well-built financial plan can greatly increase your chances of accomplishing your goals and keep you accountable.