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5 Financial Checkpoints for Newlyweds

| February 13, 2019
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Winter has come in full-force this year. If you’re like us, you’re ready for summer. You’re ready for the pool; for grilling; for warm nights. Or maybe you’re ready for something more – maybe you’re gearing up for wedding season.

Before the big day comes – and even before you pop the question – make sure you and your partner’s views on finances are aligned. It’s no secret that many marriages fall victim to financial turmoil.

The underlying issue may be the lack, or the absence of a financial discussion. The issue may also lie in the lack of professional guidance throughout this process. With that said, we have put together a brief checklist containing the financial steps you should consider taking prior to marriage.

  1. Consider the Cost of Your Wedding

How much do you actually need to spend on a wedding?

Based on a study conducted by two Emory University economics professors, “marriage duration is either not associated or inversely associated with spending on the engagement ring and wedding ceremony.” In other words, the amount of money you spend on your big day has either no effect or a negative impact on the longevity of your marriage.

The same study found that spending between $2,000 and $4,000 on an engagement ring significantly increases the hazard of a failed marriage. Spending more than $20,000 on the ceremony yields similar results.

If you can absolutely afford a fairytale wedding with a huge engagement ring, then go for it! However, make sure you are only paying for the must-haves. Cut out some of the frills. Instead, use that extra savings to pay down debt or put it toward the down payment on a new home.

  1. Have a Discussion About Beneficiaries

Who do you want as the beneficiary on your accounts?

This step may occur post-wedding; however, this is something that you can sit down and discuss with your partner prior to.

Decide who your beneficiaries are in each of your accounts and make the changes.

That means looking at your investment accounts, your life insurance policies, your savings accounts, your mortgages, etc. and updating the beneficiaries. You may also consider updating the registration on each account, so you and your spouse own each account together.

This sounds like a large undertaking, but it’s a few phone calls. Reach out to a financial professional who can help you get your accounts in order.

  1. Discuss Your Goals

What do you want to accomplish as a family (financially speaking)?

Discussing your goals with your partner and aligning those goals is crucial to building a strong foundation for your relationship. Set time-oriented goals that are achievable.

Maybe you want to save up 20% as a down payment on a new home. Maybe you want to save up to put yourselves in a realistic position to start expanding your family. Maybe you have debt you want to pay off together.

Whatever it may be, discuss these goals, write them down, and set desired timeframes for each.

  1. Discuss Combining Finances

Are you going to combine finances with your spouse?

Financial households vary. What works for one family may not work for another. As an example, in our most recent podcast episode, Blair mentioned a family that splits expenses. He pays one bill and she pays another. When they go out to eat or purchase household products, maybe they dip into a joint account.

In a financial situation such as this, the concern is – what happens when you have fifteen different credit/debit cards in your wallet?

There is no right or wrong. Considering the long-term nature of marriage, it does make your goals more achievable and more simplified if you do combine finances. 

  1. Put Together a Budget

Where is your money going?

If you’ve listened to the Mind of a Millionaire podcast before, or any financial podcast, you are no stranger to the concept of a budget.

You built one when you were single. You built one when you were dating. Now, it’s time to build a budget that suits you and your partner.

You have two streams of income. You have new expenses. You have new financial goals. Make sure every dollar that goes into your pocket, and every dollar that comes out, is accounted for.

Conclusion

If you are getting married, congratulations! Now, take the time to build a solid financial foundation for your relationship. Make sure you and your partner are getting off to a strong start.

Take the time to conduct these five steps prior to, or just after the big day and you may be on your way to a long, happy life.

As a reflection, here are the five steps one more time:

  1. Consider The Cost of Your Wedding
  2. Have a Discussion About Beneficiaries
  3. Discuss Your Goals
  4. Discuss Combining Finances
  5. Put Together a Budget

 

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

No strategy assures success or protects against loss.

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