Just married? These financial steps can make all the difference as newlyweds
The time has come at last; you’re married. The wonderful post-event glow is with you and you continue to plan the exciting life ahead with your other half. At a time like this, it’s a great decision to sit down and go through a brief financial checklist to ensure your future prosperity.
This doesn’t have to be an intimidating event. What we’ll be going through today is instead a set of basic matters to attend to that will bear fruit in time. Before you know it, you’ll be even better prepared for the months ahead as a married couple. Let’s take a look!
Establish your net worth as a couple
It’s helpful to know how much you are worth as two people. Understanding how much you own in the form of assets – and how much debt you are in together – is invaluable in informing your future financial and saving plans.
It’s a simple enough estimate. The value of your assets and savings are combined. Debt is subtracted from this amount, leaving your total net worth. Knowing this can give you a more reliable foundation for planning major purchases such as a house, or for saving significant sums of money for common plans such as a child’s education.
Revaluate your safety net and savings
As a couple, you’ll be saving and planning in a drastically different manner as you would alone. There are three key areas you need to cover and agree on as a couple.
Emergency fund: The golden rule stands; three months minimum at your current quality of life without an income. As a couple, this can be an entirely different figure and may require additional saving. It also may involve one partner contributing more than the other; a conversation best had early so as to avoid conflict. Always remember that you have the best interests of both of you as a team at heart!
Short term: What do you need this month where money is concerned? How about three months ahead? A year? These periods arguably fall under the short term where life planning is concerned and knowing where you stand is important for properly planning basic luxuries such as holidays and car purchases.
Long-term: The family question if you desire children. If not, you still need to create a strategy that works for you both. That house purchase is likely going to take years of effective and coordinated saving, and the earlier you have the conversation the better your results will be.
Agree on your spending and banking system: As a joint couple, it’s easy to approach a marriage’s finances in the same way as before the special day. This assumption can be a problem; it’s important,to be honest and open with each other about how finances are to be handled. For some, this means a joint account where all money is pooled and shared. Others may prefer separate accounts that allow for greater freedom. In 2018, many are opting for a half-way house: shared accounts for transparent and shared savings, with modest budgets allocated to personal bank accounts to allow for that degree of personal freedom that is so important to maintaining a healthy partnership.
Be open about debts: It’s tempting to think that you can handle debts alone before your partner is made aware, but it’s a risky premise and does little to foster the honesty that is the cornerstone of happiness as a couple.
Any debt, even a small one, should be brought into the open and discussed. Doing this early has the wonderful effect of transforming a fear into an early challenge that you and your loved one can face together. Coming through a financial challenge, even for a small debt, can be viewed as a bonding and learning experience that makes you stronger as a duo.
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