Congratulations! You got engaged over the holidays, and there’s a lot of planning to do. You’re probably thinking about seating plans and flowers right now. However, one of the first things to plan is how you and your future spouse will combine your finances. It may not seem fun or romantic, but you’ll want to talk about this as soon as possible to make sure you’re both on the same page.
Start by making a complete list of your assets and debts. Write down all of your bank accounts, loans, and credit cards. Include the balances, and what’s due on the loans and credit cards. Order a free copy of your credit report. If there are any errors on your report, now’s the time to correct them.
Don’t worry too much about what belongs to each of you; soon you’ll be combining it all. And there may be decisions to make about that too. How many credit cards should your family have? How many car loans? These are discussions you’ll want to have early.
If you do decide to close some accounts, be careful about it. If you close several lines of credit in a short period of time, that could affect your credit score. Ask your financial institution how to add your spouse to your account. Gather up any needed documents in advance so that everything will be ready after you’re married.
It’s important for both of you to have a say in how money is spent once you’re married. For efficiency’s sake, have one spouse make all the payments. Whether they’re automatically programmed or you’re sending in payment coupons and checks, having one person in charge will smooth things out. If neither one of you wants to be the one in charge all of the time, you can try taking turns. Just make sure both of you know whose turn it is each month!
Build a budget for your household that will cover all of your combined bills and payments. Don’t forget to add a line item for each of you to have a small “fun fund” so you don’t feel deprived. Keep paying into your savingsand retirement accounts each month as well. Planning now can help ensure you a secure financial future. And you’ll want to make sure you’re in agreement about your financial goals. Your budget may need some adjustments later, especially if you plan to have children.
Is one of you a saver and the other a spender? It’s important to know that going into a marriage. Talking about how the household money will be managed is a must for a healthy relationship. Having your financial matters out in the open will help you keep your household budget on track. Be flexible and give each other grace if mistakes are made along the way.
This can seem like a big, scary talk to have. But it’s worth it to avoid any problems that could derail your future happiness. With your finances in order, you’ll have more time to plan for your future together.
This article should not be considered legal, tax, or financial advice. You may wish to consult a tax or financial advisor about your individual financial situation.