Financial Planning for Getting Married
As the saying goes, marriages are made in heaven. However, all the expenses have to be borne here on earth. Marriage will introduce various changes in the financial situation of the new couple which will affect all aspects of their life and bring new challenges to the relationship. It can be difficult to understand how to navigate through such changes, but with proper planning in advance, you can easily build a strong financial foundation for your relationship. There are several essential financial moves that you can make prior to getting married.
Conduct A Financial Wellness Assessment
Before planning your wedding you should first share your financial story with your significant other. You need to know exactly where both of you stand. Your assessment should include important information about your current financial status. Review your recent expenses to create a spending plan. Other important financial measurements include your emergency savings, savings ratio and debt to income ratio. Your financial wellness assessment should also include assessment of your financial attitudes and confidence.
Create A Debt Reduction Plan
Before you walk down the aisle you do not necessarily have to eliminate your loan and credit card debt completely. But it is recommended that you should at least have an action plan in hand and try to execute the plan as quickly as possible. Carrying the baggage of debt into a marriage can give stress to a couple. Therefore, before getting married couples should spend time so that they can understand each other’s current debt obligations. Once you have identified the potential problem you should focus on establishing a debt reduction plan as quickly as possible.
Take Your Time To Discuss
Not everyone may find it ideal to get financially exposed in front of your future life partner. It is important to have an honest communication. You should sit down, discuss and look at your credit reports together. You should remember that you should not dwell on the past. Instead, use your past experience to guide your future financial decisions. If you have existing financial baggage it is better that you expose things early on so that you can discuss it before getting married and create an effective solutions as a couple.
Decide Ahead How You Will Reorganize After Marriage
It is important that you set up a plan for how all your bills will get paid once you get married. Some may decide to merge all of their money immediately, while some may decide to keep everything separate. Any decision taken is your personal preference, but make sure you discuss this before getting married. Also try to find out how your combined incomes will affect your tax bracket.
Discuss About Budget And Emergency Plan
Along with marriage come responsibilities. Thus, it is important that you understand your budget and combined incomes. At first you will have to take time to observe what is coming in and out as well as monitor each other’s spending habits. You can use this as an opportunity to save enough money for an emergency fund or any other short term emergency.
Be Open About Your Financial Goals
When planning to get married you should also discuss about your financial goals. Make a list of your goals and match it with your fiancé’s list and plan accordingly.
Make Sure You Have Insurance
Once you get married you will be responsible for your spouse’s liabilities as well. Therefore, make sure you have the right amount of life insurance that will help you to protect both of you in times of need. Make sure you have the right health insurance plans.