Marriage is an important moment in everyone’s life. It can also be a time of great stress as you try to plan a wedding and adjust to life with your spouse. Adding money to the equation only makes things more complicated.
If you’re about to settle down with your spouse, you can save yourself a lot of heartache and stress by following these money tips.
What do you do before marriage
Before getting married, there are a few steps you should take to ensure that you are financially ready for marriage.
1. Review financial priorities
In any relationship, it is important to make sure that you and your spouse have the same values, beliefs, and priorities. Someone who wants to live a nomadic life, never living in the same country for more than a year, will have a hard time settling down with someone who is content to live in their hometown their whole life.
- Do you believe in regular donations to charities?
- Is saving and investing a top priority for you, or do you prefer spending money right away?
- How much of your income are you willing to spend on luxuries as opposed to necessities?
- If you plan to have children, how much do you want to give them as financial support?
These questions do not have a “correct” answer. By making sure that you and your partner share the same priorities, or that you can find agreement between the two of you, you can avoid financial arguments in the future.
2. Make a list of financial goals
Just as you discuss your financial priorities, talk about your goals for the future, especially financial ones. Achieving your goals will be much easier if you can work together to achieve them, and it can help reduce stress if you make sure you don’t have goals that directly contradict each other.
- Do you want to live in a luxurious house or in a small house?
- Would you prefer to rent or own your home?
- Do you want to retire early or pursue a full career?
3. Determine how much you will spend on the wedding
One of the biggest sources of stress for newlyweds is their upcoming wedding. Weddings can be stressful at the best of times because there are so many people to plan for and so many changes to manage.
The cost of weddings is also a major source of stress for engaged couples. In 2019, the average cost of a wedding was around €34,000. Some weddings can be overpriced and cost tens of thousands more. Other couples opt for more modest weddings.
While there is nothing wrong with having an expensive wedding, there are choices that need to be made. You can use the money you spend on a luxury event for other purposes, such as making a down payment on a home. Before you start planning a wedding, talk about how important the event is to you and determine your maximum budget.
Talking about the cost of the wedding beforehand is a good way to keep the cost down negative feelings She raised different expectations regarding the cost of the wedding.
Similarly, discuss how much you want to spend on other major expenses, such as engagement rings. You can Save a lot of money On wedding expenses that aren’t really necessary and will leave you with great memories, while spending that money on other priorities like a down payment on a house.
4. Consider the marriage contract
A marriage agreement is a document that specifies how your property will be divided in the event that your marriage fails.
Although signing a marriage agreement may seem like it’s setting you up for the failure of your marriage, it has grown in popularity in recent years due to the increase in the average age of couples. The more assets you have as marriage approaches, the more meaning your prenuptial marriage can give you.
Marriage agreements aren’t for everyone, but that doesn’t mean you shouldn’t take the time to consider whether to sign one before your wedding day.
5. Opening a joint bank account
If you are about to get married, then this means that you are about to merge your finances with those of your partner. So it makes sense to go ahead and open a joint bank account. This will make it much easier to share common expenses, such as housing and food.
Couples structure their bank accounts differently, but one strategy is to have four total bank accounts:
- Joint checking account (there are several accounts available to offer a bonus)
- Joint savings account
- One individual checking account per person
This strategy allows you to combine your savings and checking accounts with your partner to easily manage shared expenses. Every month, you can transfer a fixed amount to each individual’s checking account.
You can consider the amount transferred as an allowance. This gives everyone the freedom to spend some of their money without interference from their partners.
Having both spouses of their own money makes it easy to go out with friends or make small purchases without having to check in with the spouse or risk spending money on rent or groceries.
It’s also easier to buy gifts without your partner finding out what they are beforehand.
6. Create an emergency fund and pay off debts
When you get married, you’ll have to weather the financial storms together, which means your engagement is a great time to start planning. Create an emergency fund and l Pay off your debts.
Try to set aside some money each month to build savings. Try to have between three and six months of expenses in an emergency cash fund.
This money will help you cover unexpected expenses and deal with bad situations like unemployment. Setting aside money can help you avoid a lot of financial stress in the future.
If you have debt, especially high-interest debt such as credit card debt, work on paying down your debt. If you can get married without high-interest debt, you will set yourself up for financial success.
7. Create and track a joint budget
Budgeting is important so you know how much money you make and where all your money is going. If you don’t have a budget, it’s easy to overspend without realizing it, leaving you with nothing at the end of the month.
Getting married is a great opportunity to budget together for the first time or review your current budgets. When you get married, you will combine your income and expenses.
Some expenses, such as food costs, will increase, while others will remain relatively the same or decrease, such as housing costs.
Take a few months to create and practice a joint budget, then track your spending and adjust your budget to suit your needs. If you have a good budget when you get married, you’ll be ready to manage your money and make sure you can save for the future.
What do you do after marriage
1. Update beneficiary information for individual accounts
when you Open a bank account or investment account, the bank or investment company may require you to designate a beneficiary for your account.
If you die, the money in the account is transferred to your beneficiary. After marriage, you must add your spouse as a beneficiary in any account you opened prior to your marriage.
If you don’t designate a beneficiary and something happens to you, the account can be transferred to your heir. By designating your spouse as the beneficiary of the account, you ensure that your money will go directly to your spouse without having to deal with the legal system or other bureaucratic inconvenience.
2. Consider changing your health insurance plan
When you get married, you have the option to update the health insurance plan that you purchase from the insurance office or your employer.
Married couples can often use family insurance plans to be covered by the same insurance. Depending on which contracts you both use, you can save money by subscribing to a family plan instead of staying covered by two individual plans.
3. Discuss your finances regularly
While it is important to make sure that you and your spouse are aligned on your financial priorities and goals before marriage, money should be an ongoing theme in your relationship. You should take time, at regular intervals, such as monthly, quarterly, or annually, to sit down and think about your finances together.
Use this time to reflect on your financial situation as a family. Are you on the right track to achieve your goals? Need to update your budget? Do you have any financial concerns that you want to discuss with your partner?
It’s easy to get in the habit of avoiding discussions about money, but it’s important even though it can be stressful. Having a regular schedule to discuss money with your spouse makes it easier for you to stay on the same page and on the right financial track.
4. Divide and conquer
When it comes to working together to stay on track financially as a family, it’s important to divide the financial tasks between you. While this works for some couples, if one person manages all the money in the house, it’s easy to blame yourself for how the money is managed or spent.
Find a division of labor that works for you as a couple. Maybe one of you can handle the monthly bills while the other keeps track of the budget. No matter how the work is divided, making sure you both do some household financial tasks can keep you both invested in your financial life and stave off resentment.
Marriage is an exciting but potentially stressful time. Money matters only make this stress worse. The most important thing is to make sure that you and your partner have similar financial priorities and that you can find a way to compromise your financial differences.
If you take the time to think about how you will manage your family’s finances before you get married, you can save yourself a lot of money arguments and stress along the way.