Every bride loves planning the wedding of her dreams; sometimes, even the groom joins in. And both look forward to becoming husband and wife, building their first home together and embarking on that first year of newlywed bliss. However, as they start the foundation of a lifelong marriage, many couples neglect one major aspect to the building process: marrying your finances.
Discussing and merging finances is crucial for every couple, especially given that fights over money is a leading cause of marital discord. As a result, Patrick Bet-David, a financial advisor, author and CEO, has made financial literacy his crusade. He says talking about finances not only reduces fights, but also can set you on a path toward a successful financial future.
To get you started, Bet-David offers six tips for combining your finances and giving you a solid financial foundation to build on going forward.
1. Know Each Other’s Financial Histories. Gather all of your paperwork, statements, bills and personal financial information, and really evaluate your finances so you both are on the same page. Do either of you have student loans or credit card debt? What kind of retirement plans or saving vehicles do you contribute to? How much are you paying for your cell phone and cable bills? Do either of you have an emergency fund? What is your general attitude about money?
2. Beneficiaries. Revisit all of your accounts from retirement plans and insurance policies, and update your beneficiaries where you see fit.
3. Insurance. Review your medical, life and car insurance plans. You may find that combining coverage may save you money or that your plans have some overlap.
4. Name change. If you or your spouse is opting for a name change, it is important to notify the Social Security Administration and the DMV (this includes your driver’s license and your car tag). You also will want to notify your financial institutions (including credit card companies), notify your insurance providers and change relevant identification such as a passport.
5. Joint or Separate Accounts – or Both? Long gone are the days when it was assumed that marriage meant newlyweds would open a joint bank account and share credit cards. Some couples are now keeping separate accounts while others still choose the traditional route, and everything in between is a viable option.
6. Determine a Budget and Financial Goals. Getting married is a good time to start the invaluable practice of budgeting. Once you have a joint budget, you can evaluate your discretionary income and determine both short- and long-term financial goals. When it comes to spending, the rule is simple: If you can’t afford it, don’t buy it. This will go a long way in helping you save as well as maintaining a low debt level.
As you embark on this new journey, keep one thing in mind: In any financial discussion, the key is open communication between both partners. Although it may take some time to work out a solution you both want, by doing so together you’ll maintain both firm financial footing and marital harmony, both of which could go a long way in creating a strong, healthy marriage.