Before wedding planning kicks into high gear, make discussions about your finances a priority. Taking the time now to talk through money matters can create a good foundation for your collective future. Use the following six principles to direct your money conversations:
1. Open-minded. Take turns sharing your vision for cash management as a married couple. Listen carefully to what your prospective spouse says is important to him or her. Acknowledge your gaps and build on your strengths. If your expectations do not match up, try to find a compromise. Some couples sidestep conversations about cash to prevent feelings of hurt, fear, anger or guilt. Creating a habit of frequent communication might help you avoid heated arguments, and will help ensure you are on the same page financially before you walk down the aisle.
2. Honesty. Share the specifics of your financial history and current situation in case you have not already done so. Your future spouse deserves to know whether you’re paying off college debt, or if you’ve made any financial mistakes in the past (and the way you have rectified them). Disclose the fantastic news, too. Divulge details about savings you have tucked away or a family trust which will help supplement your income so you know the sum of where you stand.
3. Forward-thinking. As soon as you’ve shared your present situation and background, discuss your goals for the future. Be open about what your dreams are, but be ready to compromise. While you don’t have to agree about everything, having shared goals (buying a house, saving for college if you choose to have kids, retirement, etc.) lets you combine forces on economies and gives you a road map for paying.
4. Cooperation. To avoid any miscommunications as newlyweds, talk and assign responsibility for financial functions. Is one of you at tracking online accounts and paying bills? Are you both enrolled in a retirement accounts and taking maximum advantage of employer contributions? Who will be the primary contact for your financial advisor, tax professional or estate planner? Two is better than one when you’re ready to divide and conquer financial jobs, but make sure you’re both in the loop on key decisions and money matters.
5. Diligence. As soon as you’re married, make it a priority to update your financial documents. It takes discipline, but taking good care of these housekeeping tasks immediately protects you if something unexpected occurs. Several steps to consider:
• Update financial accounts, insurance policies and credit cards with any name changes, and if desired, add your spouse as an owner and beneficiary to those balances.
• Consider combining your bank accounts if it makes sense for your circumstances.
• Amend your tax withholdings, to make sure the right amount is withheld from your paycheck that you are married.
• Choose your wellbeing insurance. If both of your employers provide health insurance, carefully assess your coverage options and premiums for the best fit.
Like most things worth achieving, preparing for a life of financial compatibility requires work. If you and your prospective partner can commit to the identical money values, it may help you create a solid financial foundation.