Getting engaged and married is a thrilling period in anyone’s life. It may also be a stressful period as you prepare for your wedding and adjust to live with your partner. Adding money to the situation just complicates matters.
If you’re going to settle down with your significant other, these money-saving tactics can spare you a lot of sorrow and frustration.
What to Do Before Getting Married?
Before you marry, you should take a few precautions to ensure that you are in excellent financial standing.
1. Discuss financial priorities.
In every relationship, it is critical to ensure that you and your spouse have comparable values, views, and objectives. Someone who desires to live a nomadic existence, never staying in the same place for more than a year, will have difficulty settling down with someone who prefers to remain in their hometown their whole life.
Talking about money might be unpleasant, but it’s crucial to discuss your financial goals with your spouse.
Do you believe in making frequent gifts to charities or churches?
What are your daily spending habits?
Is repaying debt, such as school loans, or saving and investing a top priority for you?
Do you like to spend money in the moment?
What percentage of your salary are you prepared to spend on luxuries vs necessities?
If you intend to have children, how much financial assistance do you want to provide for them?
Will you pay for child care, or will one of you remain at home with the children?
Will you pay for their entire college education?
Do you anticipate your children to financially support you in your old age?
What are your retirement plans?
Do you want to start an IRA or other retirement accounts now or later?
These questions do not have a “correct” solution. Making sure you and your partner have comparable objectives or can reach an agreement somewhere in the center will help you prevent future money disputes.
2. Create a List of Financial Goals.
share your future objectives, particularly financial ones, in the same way that you share your current financial priorities. It will be much simpler to achieve your goals if you can work together, and it will assist to lessen stress if you avoid having goals that directly contradict one another.
Do you wish to live in a luxury or a tiny house?
Would you like to rent or buy your home?
Do you want to retire early or work a complete career?
3. Determine How Much to Spend On A Wedding
The impending wedding is one of the most stressful times for newly engaged couples. Weddings can be stressful even in the best of circumstances because you have to arrange for so many people and handle so many moving aspects.
The expense of weddings is another huge cause of stress for engaged couples. In 2019, the typical wedding cost around $34,000. Some weddings can be lavish, costing tens of thousands of dollars more. Other couples want considerably more modest nuptials.
Although there is nothing wrong with planning an extravagant wedding, there are some trade-offs. You may put the money you’d spend on a costly event towards another goal, such as a down payment on a house. Before you begin planning a wedding, discuss how important the occasion is to you and choose a maximum budget.
Talking about the expense of your wedding ahead of time might help to alleviate any negative sentiments caused by divergent assumptions of how much a wedding costs.
Similarly, talk about how much you want to spend on other big-ticket items like your engagement jewelry, bridal shower, and bachelor party. You may save a lot of money on unnecessary wedding costs and still have lovely memories while allocating that money to other priorities, such as a down payment on a home.
4. Consider a prenuptial agreement.
A prenuptial agreement is a legal contract that specifies how your assets will be divided if you divorce.
While signing a prenuptial agreement may appear to be prepared for your marriage to fail, they’ve been more common in recent years as typical marital ages have increased. A prenuptial agreement may make sense for you if you have a lot of assets before getting married.
Prenuptial agreements are not for everyone, but you should think about if signing one before your wedding day is a smart idea.
5. Open a joint bank account.
If you’re getting married, you’ll be combining your money with your partner. It seems sensible to be ahead of the game and set up a joint bank account. This will make it much easier to share common expenditures like rent and groceries.
Different couples set up their bank accounts differently. Some people integrate their funds, while others keep them separate. One option that incorporates both approaches is to have four bank accounts:
A joint checking account (there are several available that give a monetary incentive).
A shared savings account (imagine a high yield account with CIT Bank)
Individual accounts for each person’s personal expenditures.
This technique allows you to consolidate your savings and bank accounts with your partner, making it easier to manage shared costs. Every month, you can send a predetermined amount to each person’s separate bank account.
You might think of the transferred money as an allowance. This allows each person to spend portion of their money without their partner’s approval. Each spouse having their own personal cash allows them to go out with friends or make modest purchases without having to consult with their spouse or risk wasting money set aside for rent or food. It also makes it easy to buy gifts without your partner knowing what they are beforehand.
6. Create an emergency fund and pay off debt.
When you marry, you will have to weather financial storms together, so your engagement is an excellent time to begin creating an emergency fund and paying off debt.
Try to save some money each month. Try to keep three to six months’ worth of spending in an emergency fund in cash. That money will help you meet unforeseen bills and weather difficult times like unemployment. Saving money now might help you prevent a lot of financial trouble in the future.
If you have debt, particularly high-interest debt such as credit card debt or pricey vehicle loans, attempt to reduce your balances. If you can enter your marriage free of high-interest debt, you will be setting yourself up for financial success.
7. Create and track a joint budget.
Budgeting is essential for understanding how much money you earn and where it all goes. If you don’t have a budget, it’s simple to go beyond without realizing it, leaving you with nothing at the end of the month.
Getting married is an excellent chance for couples to set their first budget together or to reassess their existing finances. When you marry, you will combine your income and expenses. Some expenses, like as food, will rise, while others, such as housing prices, will remain stable or fall.
Take a few months to create and practice living on a shared budget, then track your spending and adjust the budget to meet your requirements. If you have a healthy budget before you marry, you’ll be better prepared to handle your money and save for the future.
If you don’t already have a budget, establish one immediately. You may get started quickly with an online tool like Tiller or Personal Capital.
Couple Budget Planning: Calculating Bills
What to do after getting married?
Once you’re married, you should take further precautions to ensure that you’re financially prepared for the future.
1. Update beneficiary information for individual accounts.
When you create a bank or investment account, the bank or brokerage may request that you identify a beneficiary for the account. If you die away, the funds in your account are transferred to your beneficiary. After the wedding, make your spouse the beneficiary of any accounts you started before you were married.
If you do not name a beneficiary and die, the account may pass to your estate and become subject to probate proceedings. Naming your spouse as the account’s beneficiary ensures that your money is sent immediately to your spouse without having to deal with the legal system or other bureaucratic annoyances.
2. Consider Changing Health Insurance Plans.
When you marry, you can update the health insurance plan you purchased from the insurance marketplace or via your workplace.
Married couples can frequently utilize family insurance policies to ensure that they are both covered by the same policy. Depending on the policies you both use, you may be able to save money by enrolling in a family plan rather than two separate plans.
3. Get disability and life insurance.
If you don’t already have disability or life insurance, getting married is a wonderful opportunity to consider acquiring these. This is especially true if you provide the majority of the money for your family.
Disability insurance from a business like Breeze might help you replace your income if you become disabled and unable to work. Although certain government programs, such as Social Security Disability, might assist you if you become disabled, private disability insurance can give a significantly greater payment and make it simpler to manage your bills.
Purchasing both short-term and long-term disability insurance is typically a smart choice.
Life insurance provides your family with a lump sum of money if you die. Because you and your spouse will have shared costs, your spouse may be unable to make ends meet if you die unexpectedly and your home loses your share of its earnings.
Given that the death of a loved one is already a tough moment, you don’t want to burden your spouse with financial problems on top of the grieving process. Life insurance can assist ensure that your family has enough money to get by while they grieve and adjust to their new lives.
4. Hold regular discussions about your finances.
Although it is critical to ensure that you and your spouse agree on financial objectives and goals before marrying, money should be a continuous discussion throughout your relationship. You should set aside time at regular periods, such as monthly, quarterly, or yearly, to sit down and review your finances together.
Use this opportunity to assess your family’s financial situation. Are you on pace to achieve your goals? Do you need to adjust your budget? Do you have financial worries that you wish to discuss with your partner?
It’s easy to avoid financial talks, but they’re necessary, even if they’re difficult. Setting aside time on a regular basis to discuss money with your spouse will help you stay on the same page and on track financially.
5. Divide and conquer.
When it comes to working together to keep on track financially as a family, it’s critical to split financial responsibilities between you two. Although it works for some couples, if one person handles all of the household finances, it is easy to get resentful of one another about how money is managed or spent.
Find a workload breakdown that works for you as a pair. Perhaps one of you could handle the monthly bills while the other maintains track of the budget. Regardless of how you divide the labor, ensuring that you both handle part of the household’s financial duties will help keep you both involved in your financial life and avoid animosity.
In Conclusion
Getting married is a joyful but somewhat stressful experience. Money troubles simply exacerbate the tension. The most essential thing is to ensure that you and your spouse share comparable financial interests and that you can work out any financial discrepancies.
If you think about how you’ll handle your home finances before you marry, you may save a lot of financial fights and worry later on.
