Money is one of the most common things that couples fight about—but it doesn’t have to be. Taking the following steps before (or soon after) the wedding could help you start your life together on strong financial footing:
Don’t avoid the money talk.
Discussing your finances can be a bit uncomfortable for many couples, but those who tackle it head-on will be better for it. Make sure you both understand each other’s financial goals and spending habits. While you may have different answers, this conversation can help you develop an approach to money management that works for both of you.
Set a budget.
A mistake many couples make is not establishing a budget early on. After assessing your finances as a pair, determine how you’ll spend your money each month. Are there certain expenses that you should be cutting back on and others you should be saving up for? Coming to an agreement on these things and setting a budget will be beneficial for the health of your bank accounts and your relationship.
Make a plan for your accounts.
There is no ‘right’ way to manage your accounts. Couples can choose to have exclusively joint accounts, a joint account and separate accounts for saving or personal spending, or completely separate accounts. Before you tie the knot, make sure to discuss your preferences together and decide what makes you both the most comfortable.
Set up an emergency fund.
Life is full of surprises, and unfortunately, some of these surprises can be expensive. Having an emergency fund will help you avoid precarious financial situations should something come up. It’s important that you decide together how you’ll set aside the money.
Establish a minimum cost for discussing big expenses.
While not all purchases demand a conversation, more expensive ones that impact the family budget should. Determine what that threshold is as a couple. For any expenses above that cost, you both should agree on whether it’s a necessary purchase.
Update your beneficiaries.
Now that you’ve officially tied the knot, you should likely identify your spouse as the person who will receive the benefits of your will, life insurance policy, and financial accounts like your 401(k), checking, and savings. Make sure you handle this long before it’s necessary—if an emergency arises, this will be the last thing on your mind.
Source: American Bankers Association