The date is set and the venue chosen. Now, you’re counting down the days until the big day. You’ve put hours into making your wedding day perfect, and you’ve worked hard at making sure every detail is covered. However, have you thought much about life after the wedding? When the music fades and the guests go home, it’ll be time to start your life together, and that can come with some surprises if you haven’t planned for getting off on the right foot financially.
Getting married is a big step, and a very big commitment. Blending your life with another person can mean lots of adjustment and some challenges along the way. One of the bigger challenges of marriage is combining your finances. Everyone has a different way of viewing money and managing it. However, to be successful in marriage, couples need to get on the same page financially. After all, money is the number one topic cited when couples are asked what they argue about in their marriage.
Before you say your “I do’s,” you need to consider and discuss some things. In order to be successful financially, there’ll need to be plenty of ongoing discussions, but you can start with a few key strategies to get you off on the right foot.
Talk About Money
Many couples never really talk about money until after they’re married and must now figure out bank accounts, bills, and other important money matters. That can lead to some strife and misunderstandings, which is no way to start your lives together. Long before you walk down that aisle, you should be talking about money so you both have a feel for how the other one views managing finances.
One topic to talk about is each of your current financial situations. If you’re both working, discuss your salaries and take-home pay. It’ll be hard to choose an apartment to live in if you don’t know what you can afford each month. In addition, you should discuss your credit situation and any outstanding debt you each have. It would be grossly unfair to go into a marriage with a large amount of undisclosed debt. Not to mention, keeping secrets from one another is a very bad start to blending your lives together. Besides, it’ll all come out anyway when the two of you try to make your first big financial move together, such as buying a house or car.
It’s also important to discuss any money problems you’ve had in the past and how it may have affected your credit scores. Again, this will have a big effect on any money moves you want to make in the future, so full disclosure is a necessity. Knowing about the problem ahead of time will give you the opportunity to start working on it now and help you improve your situation. Many credit issues can be made better with teamwork.
Also, develop a plan on how you’ll manage your day-to-day expenses and who’ll take the lead on making sure bills are paid on time. Once you’ve begun the discussion about money, it’s important to keep it going. Make it a part of your everyday lives so there are no surprises to sabotage your relationship.
Don’t Go into Debt with a Big Wedding
Weddings don’t have to be expensive to be special, and going into a large amount of debt is no way to start your lives together. If you’re going to be paying for your own wedding or even a portion of it, do everything you can keep from running up a big bill.
Here are some ways to save money when planning your wedding:
- Have your wedding at home or at a free public venue such as a park.
- Save on flowers by doing your own bouquets and arrangements. You can buy loose flowers much more inexpensively than arrangements made by a florist.
- Do your own catering if you’re having your wedding at a home or at a small venue that’ll allow it. Call on friends and family to help. .
- Stock your own bar and keep things simple. You can serve limited offering such as Mimosas or Bloody Mary’s, or just stick to beer and wine.
- Keep your guest list small and only invite people who are close to you and invested in you both as a couple.
- Don’t spend a large amount on a wedding dress or on renting tuxedos. There are many dresses that can be bought “off the rack” that are beautiful and not outrageously expensive. Also, look around for dresses you can buy second hand. A good tailor can fit any dress perfectly and even add detail to the dress to make it unique. For the groom, just stick with a nice suit.
- Keep your decorations simple and elegant. Look around in local consignment shops and online to find items you can use and talk to family and friends about what they may have that you can borrow.
- Don’t hire an expensive wedding band to provide your entertainment. Look around for a good DJ or, even better, a friend or family member who can help with entertainment.
- Keep your invitations simple and inexpensive by making them yourself or using an online printer. You’ll be surprised at how beautiful your invitations can be without spending loads of money.
The bottom line is that a wedding only lasts for a few hours; if you overspend and create a big debt load going into a marriage, you could be creating a problem that may take years to pay off. So, keep it simple and keep your costs low.
Open a Joint Checking Account
This is best done ahead of the wedding, especially if you’re sharing the expense of your ceremony and reception. Managing through the financial aspects of your wedding will give you some good practice at managing bigger events as they come along in your marriage.
Also, you’ll need a joint checking account to manage your day-to-day expenses, which will begin the moment you say “I do,” so don’t wait until after the wedding to get this done. Most advisors caution against keeping separate accounts as this can complicate matters, create hostilities, and increase the chances that a bill will be missed or a misunderstanding will occur. If you’re going to get married, you need to be prepared to go “all in.” That means setting up direct deposit for the new joint account, managing your bills together, and not keeping finances separate.
Talk About Goals
Having expectations that are aligned is one of the secrets to a happy marriage. When two people have different ideas about how life is going to play out, it’s a recipe for disappointment and unhappiness. Discuss what you want to accomplish and when, such as buying your first home, having your first child, or how you’re going to save for retirement.
Discussing these things ahead of time and coming to agreement on major milestones and their timing will avoid conflict down the road. It’ll also help you develop a game plan for accomplishing your dreams and goals.
If you want to save for a house, develop a plan to divert money each month to a savings account. Discuss ahead of time how you’ll treat things such as bonuses, tax refunds, and any other windfalls that may come your way. To practice reaching goals together, set a small goal that you can work on together such as saving for new furniture or a vacation. Use this learning process to develop ways to work together to accomplish bigger and bigger goals.
Develop a Set of Ground Rules
No one approaches money and spending the same way, which is why it’s important to establish some rules of the road for your everyday financial life with your new life partner. This is another reason why working from a joint checking account is important. Imagine if you kept your finances separate and never discussed who was going to pay what bills or if there were no rules about how money is spent in the marriage. It’s likely to create the potential for a bad situation.
You must have a set of ground rules about spending. Perhaps create a spending threshold that one partner must seek agreement with the other in order to cross. In addition, it must be established when, how, and by whom monthly bills will be paid. Additionally, if you’re saving for a big purchase, agreements must be made on how much is going to savings each month and under what circumstance the money can be accessed. This can save a lot of conflict in the marriage and set your marriage up for financial success.
Don’t Consolidate Your Individual Debts
If you’re both bringing some debt into the marriage, or if one partner has a difficult credit problem that needs to be resolved, don’t make the mistake of consolidating your debts. It’s not necessary and it could cause more harm than good.
If one partner has a lot of student loan debt or a large credit card debt problem, don’t make moves to put that in both your names such as transferring balances to each other’s cards or to joint cards. All you’ll accomplish is damaging the credit of the partner with the better credit score. You can work together to get things paid off without combining them and keep at least one good credit score to use when it’s time to make a big purchase such as a car or a home.
Seek Advice from a Financial Planner
It may seem silly to talk to a financial planner at this stage, when you don’t have many joint assets and you’re just getting started in your new life together. However, in reality, this might be the perfect time. A consultation with a financial planner doesn’t cost very much but you could get some great advice on how to get started out on the right foot. Financial advisors can help with all kinds of things, such as budgeting, long- and short-term goal setting, saving for retirement, as well as how to insure yourself best. Getting advice before you make any big decisions could be crucial in avoiding mistakes and making good, solid financial decisions.
One of the best aspects of using a financial planner is that you’ll get a neutral expert who can help you clarify and streamline your financial goals and put good everyday money management practices into place. This can help you start right and reduce conflict should you disagree with your partner on any money management topics.
Getting married is an exciting time in life. It’s easy to get somewhat carried away and throw caution to wind about finances. However, don’t make the mistake of getting yourself off to a rough start in your marriage. By making some smart moves before you take the plunge, you can set yourself and your partner up for a happy and financially healthy life together.