Before wedding planning kicks into high gear, make conversations about your finances a priority. Taking the time today to speak through money things can create a good foundation for your future. Use the following six principles to guide your money conversations:
1. Open-minded. Listen carefully to what your future spouse says is important to him or her. Acknowledge your gaps and build on your strengths. If your expectations do not match up, look for a compromise. Some couples sidestep discussions about cash to avoid feelings of hurt, fear, anger or guilt. Creating a habit of regular communication may help you avoid heated arguments, and can help ensure you are on the same page financially before you walk down the aisle.
2. Honesty. Financial secrets can destroy trust. Share the specifics of your financial history and current situation in case you have not already done so. Your future spouse deserves to know whether you’re paying off college debt, or if you’ve made any financial mistakes in the past (and the way you have rectified them). Disclose the good news, too. Divulge details about savings you’ve tucked away or a family trust which will help supplement your income so you both know the sum of where you stand.
3. Forward-thinking. Once you’ve shared your present situation and history, discuss your goals for the future. Be open about what your fantasies are, but you should be ready to compromise. While you don’t have to agree on everything, having shared goals (purchasing a home, saving for college if you decide to have kids, retirement, etc.) allows you to combine forces on savings and gives you a road map for spending.
4. Cooperation. To avoid any miscommunications as newlyweds, discuss and assign responsibility for financial roles. Is one of you at monitoring online accounts and paying bills? Are you enrolled in a retirement account and taking maximum advantage of employer contributions? Who will be the principal contact for your financial advisor, tax professional or estate planner? Two is better than one when you are able to divide and conquer financial tasks, but be sure you’re both in the loop on key decisions and money matters.
5. Diligence. As soon as you’re married, make it a priority to update your financial documents. It requires discipline, but taking care of those housekeeping tasks immediately protects you if something unexpected happens. Several steps to consider:
• Consider combining your bank accounts if it makes sense for your circumstances.
• Amend your tax withholdings, to make sure that the right amount is withheld from your paycheck that you’re married.
• Choose your wellbeing insurance. If both of your companies offer health insurance, carefully evaluate your coverage options and premiums for the ideal fit.
Like most things worth attaining, preparing for a life of financial compatibility requires work. In the event you and your prospective partner can commit to the identical money values, it may help you create a solid financial base.