Financial Focus: Discuss Finances Before Wedding--and After Honeymoon
Discuss Finances Before Wedding--and After Honeymoon
It's coming for spring, a popular time for weddings. If you're planning to marry, you've got a lot of things to think about: guests, flowers, the honeymoon, etc. However, there's one factor you won't want to overlook: how you will handle finances as a couple. It may not be as much fun to talk about as, say, the food at your reception. But as your marriage progresses, it will be far more important.
In fact, financial troubles are often cited as one of the leading causes of divorce. And, as you go through life, you'll find that you can't prevent every type of financial woe, such as a job loss, an unexpected medical bill, and so on. But there's a lot you can control--if you work together.
Before the Wedding: Open the Books
Before you get married, you should already know your partner's temperament, likes and favorite activities. But do you know how much money he or she makes? How about debt? How large are his or her debt payments each month? What amount of savings will your future spouse bring into the marriage?
It may feel strange to talk about these issues before you "tie the knot." But it will be a valuable conversation. Try to conduct it when you both have plenty of time and aren't stressed out over wedding plans or other issues. And don't keep any secrets: Bring out all sources of income, debts, savings and investments--everything you both will bring into the marriage. Once you're married, neither of you should be surprised at what the other owns or owes.
After the Wedding: Chart Your Course
Early in your marriage, you'll want to make some long-lasting financial decisions. Here are two to consider:
* Checking accounts- Should you maintain a joint checking account, two separate accounts or a joint account plus individual accounts? There's really no one right answer for everyone. You might want to use a joint checkbook to pay the mortgage, utilities, car payment and other major expenses that you incur together, while keeping individual accounts to pay for personal expenses or purchases. However, if you do keep a joint account, you should both agree on what it's to be used for, and how much you will each contribute to it.
* Investment goals- Talk about those goals for which you'll want to invest, such as a house or a specific retirement lifestyle. If you have children, you may want to save for college. In any case, once you know what you're saving for, you'll be able to establish appropriate investment strategies, possibly with the help of a financial professional. Keep in mind that you and your spouse may have different tendencies--that is, you might favor aggressive investments, while your spouse may be more conservative. You'll need to reach some common ground if you're going to invest in a way that will satisfy both of you.
Communication Is Key
Ultimately, the biggest factor behind your financial success as a couple isn't how much you make or how smartly you invest or how cleverly you manage your money--it's how well you communicate. If you're always on the same page, your story will be much more likely a happy ending.
This article was submitted by local financial representatives of Edward Jones.