You’re ready to begin this new chapter of life together and now after all the excitement of the big day wears off, you’ve got a few big issues to deal with – your finances included!
Where to begin? Here are 7 big money moves you and your partner need to make now that you’ve tied the knot.
1. Move Your Money (Literally)
The time has come to decide whether you will keep separate bank accounts or combine your finances. There’s no right or wrong answer here, as long as you are open, honest, and working together as the team you are.
Discuss what’s best for your relationship in terms of accountability, management and habits. If you need help deciding on whether or not to merge your money, check out this breakdown of each option for more information of check out a course like the Newlywed Money Bootcamp which will help you make a smart choice for your situation.
2. Get on the Same Financial Page
Communication is key in the months and years ahead. Get organized and start by setting S.M.A.R.T financial goals.
Make sure you each have a voice in the household and begin by sitting down individually to list and prioritize the goals that are most important to you. Then, come together and work as a team to create a master list of goals that make you both happy.
From there, create an actionable plan to reach your financial goals.
3. Establish and Maintain a Household Budget
Budgets don’t have to be boring. Agree on a spending plan that will help you reach the financial goals you set together, and stick to it! Know precisely what your monthly income is, and track your spending to ensure your purchases are in line with what you value.
4. Consider Everyday Money Questions
Don’t skip the small stuff! Take time to discuss the following:
- How will you make purchases? With a credit card to rack up rewards points, or with a debit card or cash to eliminate spending temptation?
- Who will be responsible for keeping up with receipts or tracking monthly cash flow?
- Will you pay bills as they come in or will you set up automatic payments?
- If you go automated, who will check on each account periodically to make sure everything is running smoothly and no errors have been made.
5. Decide How to Destroy Debts
Come together to discuss the debts each of you may be bringing to the table. Consider credit cards, personal loans, student loans, car loans, etc. When talking debt, ask questions like:
- Will you each remain responsible for your own debts, or will you take partial responsibility for debt that your partner is bringing to the table?
- Will you maintain separate accounts to make repayments with if you are handling debt individually?
- How will paying off debt affect saving for other goals?
Remember, communication is key here. Try not to judge, get defensive or keep information from each other. You should each have a voice in how this pans out.
6. Settle Insurance and Estate Issues
Do some research and see if combining insurance coverage will save you money and secure a better rate (or better benefits, if one of you has a great plan and the other’s is lacking). Remember to ask if your current doctors will be covered under a new plan.
Consider purchasing life insurance if that makes sense for your situation. To determine how much you need, think about the loss of income that would occur to you or your spouse should something happen to either of you along with any outstanding debts.
Although no one likes to think about the worst happening, you need to do so if you want to be financially responsible. You both need to create wills that encompass your assets and wishes. You will also want to include Durable Power of Attorneys for finances and health care.
7. Plan for Periodic Money Chats
Schedule a monthly money date with your significant other where you can both talk about your finances, get an update on your budget and progress towards your goals, and plan ahead for money matters you want to handle in the next month or so.