Congratulations on getting married! As you embark on this exciting chapter together, it’s important to lay a strong financial foundation to ensure your future is just as bright.
While it's easy to get caught up in the joy of newlywed life, some money mistakes can sneak up on couples that can impact their financial health long-term.
To help you avoid these common pitfalls, here are some tips from the American Bankers Association to keep your finances in sync as a team:
Have the Money Talk
Talking about money isn’t always easy, but it’s crucial for a successful partnership. It’s important to understand your partner's financial goals, habits, and priorities early on. Whether your answers to financial questions are the same or different, having an open conversation can help you both get on the same page about your money management approach. It will also strengthen your communication skills in the long run.
Don’t Skip Out on Budgeting Conversations
One of the biggest mistakes couples make is not setting a budget together. Once you’ve assessed your finances as a team, it's time to decide how you’ll manage your money. What monthly expenses need trimming, and what larger goals do you want to save for? A clear budget will help keep your finances in check and can even help prevent unnecessary tension around money. Plus, it ensures you’re both working toward the same financial goals.
Decide How to Manage Your Accounts
There’s no universal "right" way to manage joint finances, so take time to talk about what works best for you both. Some couples prefer joint accounts for everything, while others like to keep some finances separate. Whether you opt for completely shared accounts or a mix of joint and individual ones, the key is making sure both of you feel comfortable with the setup.
Set up an Emergency Fund Together
Life happens, and sometimes those surprises come with a hefty price tag. Whether it’s an unexpected medical expense or a car repair, having an emergency fund is essential for handling these financial challenges without stress. Discuss how much you both want to set aside each month for this fund, and agree on the goal amount so you can feel financially prepared for the unexpected.
Establish a “Big Purchase” Conversation Threshold
Not all expenses require a deep discussion, but large purchases definitely should. Decide on a dollar amount that warrants a conversation between the two of you—this way, you can ensure you’re both aligned before making any significant financial decisions that could impact your budget.
Update Your Beneficiaries on Financial Accounts
Once you’re married, it’s essential to update your beneficiaries on important financial accounts such as your will, life insurance, and retirement accounts. This ensures that your spouse is legally recognized to inherit your assets should anything happen. Don’t wait until a crisis occurs—take care of this task sooner rather than later to give you both peace of mind.
Starting your life together with a clear financial plan will help you both build a strong future. Take the time to talk through these points and make decisions that will support both of your goals and dreams.
This article was derived from an article written by the American Bankers Association. To view the original source material, visit their website.
