Important Money Matters
Tip: Work as a team in managing your finances and maintain equal voices in your partnership no matter how much money either of you earns.
As two partners come to form one household, there are both short and long-term financial issues that need to be discussed. It is very important that both of you are involved in financial planning and decision making, even if one party will be handling most of the day-to-day tasks and transactions. Here are the four important financial issues that should be discussed before marriage.
Define Your Financial Machine:
There are several different options for setting up your household’s finances. Some couples keep separate accounts and split monthly expenses while others pool all their income. Many experts recommend keeping separate personal accounts and creating a joint account for household expenses. Having your own accounts and maintaining at least one credit card in each of your names will ensure good individual credit standings. Regardless of your account structure, you should discuss your overall financial plan and monthly budget together. You should work as a team to create a plan for bookkeeping and ensure that bills will be paid and all financial obligations will be met. You should also openly discuss your individual assets and debts as these could become a factor in the future of your household’s financial machine. For detailed information on blending your finances, visit Merging Your Money.
You may each have your own health, car and life insurance, but it is still important to discuss these policies to decide if it is better for you to retain your individual policies or look into combined options. It is also important to discuss the concept of wills and make sure that both of you have one in place. To learn more about this topic, visit Insurance, Retirement Plans & Wills.
Discuss Financial Goals:
You and your partner may have strong ideas about your financial goals for the future whether it be buying a house, getting a new car, investing heavily for retirement or preparing for children. It is important to discuss these goals so that you can both be on the same page and develop a financial plan that represents both your interests. Remember, compromise is an important part of any marriage’s financial plan. Work together to set goals that compliment your individual plans as well as the future of your household.
Start Establishing Strategy:
With your financial goals decided, it is important to be fiscally responsible and put a plan in place to meet those goals and get closer to your dreams for the future. Investigate options like investment opportunities and financial advisors together as this is an important step to establishing equality and making sure that both of you are informed and active participants in your financial future.
Overall, it is important you are both aware of the structure of your financial machine and the status of your savings, debts, investments and any other money matters. Remember that both of you need to be able to locate and understand documents related to your finances and that copies of this paperwork should be kept in a safety deposit box as a backup.
For more detailed information on discussing money matters and creating a financial plan, refer to our guidebook, The Commitment Conversation.