Consider This: Perhaps your wedding is just around the corner. Or you’ve managed to survive the wedding stresses and are enjoying the honeymoon. Or you’re settling into your new home together.
Wherever you are on the newlywed spectrum, you may have heard one of the most common problems in marriage is finances. It can often lead to divorce.
So…how do you avoid falling into the trap of arguing and disagreeing about money? Financial experts have some advice for those just entering marital bliss. Some of these you might consider doing even before walking down the aisle.
Don’t be shy—talk about money. Many married couples don’t do this, and they should. Discuss your values about money. Are you spender or saver? How will you deal if you’re opposites? Talk about retirement plans, and most importantly, any debt you might be bringing to the table. And make it a regular date. Pick a time—whether it be weekly or monthly—to talk about your finances together.
Have common goals. Write down your financial goals regarding homeownership, kids, emergency fund, and other financial issues. It will help you both get on the same page, financially.
If you have debt, make plans to pay it off. Many couples often start their marriages with some sort of debt—sometimes from paying for the wedding itself. It is important to have a plan to start paying that off so that you can move forward with the life you have planned, which may involve buying a home or having kids.
Decide which decisions should be only be done as a couple. Compromise on a threshold on what each of you can spend without asking the other person. Having a clear set of guidelines of when you need to speak to your spouse about an expense is important. It gives each of you the independence to make your own decisions while providing clarity on when you need to discuss purchases as a couple.
Combine your finances. Some financial experts advise having some separate accounts, just in case of a divorce. But even those experts strongly recommend that if you do, you should be completely open and transparent about those accounts. Others suggest that combining your finances can help you work quicker to reaching your financial goals.
Think about insurance. If both of you work, find out which of you has the better health insurance plan. Don’t just look at cost, but also at the type of coverage offered. Your spouse’s plan may be more expensive but if it offers a lot better coverage, it might make sense to keep it even with the higher expense. In addition, as a single person, you might not have thought much about life insurance. But, now, as a married couple, it is an important aspect to consider.
Make a will. Contact an attorney and create one. Review them every three to five years. In addition, make sure to update your beneficiaries on your retirement accounts, life insurance, or any other investment accounts.