Marriage and finances go hand in hand. From a practical perspective getting married means you are also sharing your life, home, and prosperity with another human being. Therefore, if you plan on spending your life with another human being, pre-marriage financial counseling and planning makes a great deal of sense.
Interestingly, we freely discuss budgets and financial planning for wedding days and honeymoons. However, creating a financial plan to ensure you and your partner are planning a healthy financial future is often challenging conversations to start. Be that as it may, financial planning before marriage is essential to avoid financial pitfalls during a marriage.
How to Start Talking About Financial Goals Pre-Marriage
There is no easy way to talk about the elephant in the room, except by addressing it openly and immediately. A simple method to talking about financial goals before getting married is to ask the question outright and then begin by setting a time to really put all your cards on the table.
Questions to Ask Before Getting Married
What is your current credit score?
What existing financial goals do you have in place?
Do you have any existing long-term debt?
What are your current investments?
What type of investments do you plan on making in the future?
Do you plan on making any large purchases in the next 5 years?
Do you plan to rent or own a home?
Do you plan on having children?
How often do you go on vacation?
You’ll notice the questions you ask at the onset will be general questions about goals, habits, and an overall outlook of your partner’s financial health. This gives you a great idea of whether or not you share common habits or similar financial circumstances. At the initial stages of your conversations, it’s important to be brutally honest and disclose every nook and cranny of your financial state. At the same time be mindful with your responses to ensure you are fostering an open and trusting discussion that is free of judgment. The more forthcoming you are when financial planning as an engaged couple, the better equipped you’ll be to craft plans that will steer your future in a positive direction after the wedding.
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Pre-Marriage Financial Planning
Before you say “yes to the dress” or suit for that matter, be sure you say yes to a spreadsheet. By financial planning before marriage, you’ll also have an excellent opportunity to be financially conscious on a collective level about wedding planning. The last thing any newlywed couple needs is to face financial stressors in the early years of marriage. Instead, opt for financial transparency and ask the hard questions early on.
Most communities, banks, and even online portals have literacy training. Taking a course or running through a financial planning exercise together will solidify the importance of this topic. You may also consider meeting with afinancial planner, wealth adviser or tax adviser to formalize your financial plan and also answer any questions you may have about your financial future together.
Financial Planning for Newlyweds
If you are a newlywed and didn’t have the opportunity to develop a financial plan with your partner before getting married, don’t fret. You can still easily develop a plan during your earlier years of marriage. Here is a shortlist of financial planning tasks you should take care of in the first years of marriage:
Calculate your joint net worth.
Compose financial statements together to get a holistic view of your finances.
Outline your financial goals together.
Start a joint savings account and begin contributing to your future.
Create a shared budget, even if it’s a short-term budget, to begin with.
Schedule appointments to meet financial advisers to get on track quickly.
Begin discussing retirement plans and investments.
Overall, having financial discussions and planning your finances before tying the knot is essential to building a strong and healthy marriage. While getting in sync and holding each other accountable is a long-term process, it’s definitely the road worth traveling as financial responsibility is not something that can be ignored. More importantly, the state of your financial well-being will also impact the quality of your life together.