I am recently engaged and planning a wedding, so naturally a lot of my nights are spent pinning wedding dresses and save the dates to Pinterest boards or researching the best local bands and photographers. My fiancé and I have been together for close to eight years, so we know just about everything there is to know about each other (so we think!) and have already been through most of the “hard” conversations. What could go wrong?
While everything I’ve just said is true, I also work in finance and I know that a lot can change financially when you tie the knot. I also know that money is a difficult (and un-romantic) conversation that newly-engaged and newly-married couples should have.
So, said fiancé may not know it yet, but our nightly routine is about to change. Below I’ve laid out the top five financial conversations couples should have before tying the knot.
Debt and loans
Take the time to sit down and truly understand each other’s financial situation. In a perfect world, couples would go into marriage debt free, but many have a spouse with student loans, car loans, credit card debt or a mortgage to pay off. Once you are married those debts could become your responsibility. Consider how you are going to work together to manage it and ultimately pay it off.
Is one of you a spender and the other a saver? This is not uncommon. Make sure you address this one head on instead of waiting until one of you is frustrated. If you don’t, you could find yourself constantly arguing over each other’s spending habits. Try to establish a categorized budget that you can stick to and hold each other accountable for each month.
There is no right or wrong answer when it comes combining bank accounts or choosing to keep them separate. Some believe that keeping separate bank accounts will prevent petty fights about money and differences in spending priorities. Others say that pooling assets and liabilities creates a team mentality, which can be extremely important in a marriage. Sit down with your partner and decide what works best for you.
Long-term life and financial goals
Where do you want to be in five, ten and even 20 years? Start saving and budgeting for those things while you are young and have the power of compounding on your side!
Money management responsibility
Recognize each other’s strengths and weaknesses so that both of you can do what you do best! Some couples manage money together, but many couples designate the best person for the job.
One financial benefit to getting married is the ability to file your taxes as a married couple. You can look forward to tax deductions, credits, tax-free cash or property giving, and more.
If you have any questions or would like to meet with our team to discuss your financial situation, please give us a call at 479.442.6464 (Fayetteville) or 972.383.5300 (Plano).
– Georgia Mason, Director of Marketing and Communications