A marriage brings forth profound life changes, including the newfangled financial situation. Namely, spouses have their own spending habits and come to the new household with different assets and liabilities. Learning how to navigate these new realities is the key to preventing finances from giving both of you headaches.
To do it, you may have to set emotions aside for a moment. There are many pieces of the new financial puzzle that need to fall into place. Through it all, good communication is essential: it enables couples to work hand in hand towards financial prosperity and happiness.
Get serious with money
No need to beat around the bush: there is hardly anything romantic about this article. Indeed, worrying about the financial impact of marriage is perhaps the least glamorous aspect of tying the knot. Nobody likes talking about money that much, yet remember that this is not about being petty or greedy. Values and takes on finances differ, but some things in life must never be neglected or mismanaged.
Almost 50% of modern marriages in the west end in divorce and many of these instances echo financial difficulties and differences between would-be partners. Marriage is not just some interpersonal financial deal, but it is not a far cry from it either. Understand that financial talks do not diminish your love in any way. In fact, they can even reinforce it.
After all, it is much better to plan in advance than to allow financial woes to haunt you later. Small problems, assumptions, and misunderstanding easily get blown out of proportion. Talking about this should take much of the stress and frustration out of the equation. It ultimately enables you to focus on the things you care the most, like your family.
Therefore, do not hesitate to voice your concerns right from the get-go. Don’t succumb to sweeping problems like debt under the rug. Planning ahead of time is the only way to lay a strong financial groundwork for a lasting relationship. It empowers you to maintain your financial freedom, keep spending within the budget, and prevent quarrels from ensuing.
The art of budgeting
One of the first things you can do is to consider implications on your bank accounts.
Namely, decide whether you want to keep separate accounts or have a joint one. Both options have their pros and cons, so weight them carefully. Of course, it is also possible to find a middle ground and have both options open. In this case, you would use a joint account for family expenses such as mortgages, utility bills, groceries, rent, etc. On the other hand, your personal accounts would cover discretionary spending on clothes, entertainment, and other things.
Regardless of your decision, you also need to formulate a family budget, which is the cornerstone of your financial stability. So, take a good look at your combined cash flow and identify any pain points, such as debt payments. See how your incomes match up and try to find a way to share the financial burden without compromising your independence.
A long-term horizon
Furthermore, you are going to have to reach important decisions relating insurance and real estate. If you are both covered by a health plan via an employer, then there is not much to bust your head here. Otherwise, find the most optimal solution together, taking into account factors like premiums, doctor choices, pregnancy, pre-existing conditions, etc.
Prior to diving into married life, you might also want to discuss real estate, life, and car insurance. Namely, factor in the worst-case scenarios and possibilities of one spouse losing their income completely. It may be a grim prospect, but life insurance can help you tackle burial expenses as well as lingering debts and mortgages.
It pays off to take your time when making a decision. Shop around for best deals. Do an online research to find trusted providers that cater to clients in your particular situation. For example, companies like the Youi insurance NZ offer personalized solutions that match your preferences and marital status. They are open to any legitimate claims and have a great pricing scheme for spouses.
Finally, think long-term and engage in retirement planning.
Make sure to establish beneficiaries on pensions, IRAs, and retirement plans to enable your wealth to be one day distributed according to your wishes. Note that there are also retirement accounts that can help your tax situation, which is an added benefit. You could say that it is never too early to start saving money for retirement and trim tax expenses at the same time.
Get your financial house in order
Letting the chips fall where they may seems like the easiest way to come forward, but the consoling illusion will last only until first trouble strikes. So, wake up from daydreaming and anticipate all the ways in which marriage will change your finances.
Marriage adds new challenges to the table, from dealing with credit card debt to setting personal financial goals. Have an open conversation about every tiny detail. Come up with a realistic budget for your married life. Square away insurance and do not shy away from exploring all the avenues.
Make informed decisions and render your family finances as sound as a dollar. It would be a shame for financial problems to pose a hurdle on the way to a fruitful, long-lasting and indestructible relationship.