As you prepare for your big day, signifying the beginning of your shared life together, it is only normal for you to get caught up in the excitement. You would do well to spare a thought or two for life afterwards though. After all as they say, the wedding is for a day, but marriage lasts a lifetime.
Because finance is one of the most unromantic topics one can think of, it is one of the least discussed between couples. And many couples get to realise really late that it is one of the major foundations on which their new shared life rests. To compound things, money talk is intimately entwined with a person’s upbringing, making it difficult to find common ground. In some families, money is not talked about over the dinner table for example, while in others it is the main topic of discussion.
In this article, we outline tips financial tips that newly-weds could benefit from. They are not sexy, and definitely should not be part of the reception speech, but they should keep you going long after the wedding bells have died down and the champagne has worn off.
Be Honest with Each Other
First of all if you haven’t already done so, be honest with your spouse about your financial status. This is not so that you can be shamed, but rather so that an accurate picture of your shared net worth can be arrived at. Thus savings, checking accounts, real estate, debts-school, mortgages, credit cards, warts and all, should be brought to the table so that you can know what both of you are worth as a couple. This is the first step towards coming up with a financial plan.
Another aspect of being honest: don’t spend and hide it from your spouse. This only causes problems later. It is important that each spouse have their own personal spending space, but the moment you go beyond that, let the other know. The reason for this is simple: when you two agree tackle your financial obligations and build plans, the other is assuming they know the exact amount available. The embarrassment caused by your secret spending will only strain your relationship.
Set Financial Goals, Talk about Them Often
Set financial goals as a couple. This saves you both from getting in each other’s way. If one of you is focused on saving for retirement and the other gearing up for a faraway vacation, while drawing money from the same pool, it’s safe to say neither of you is going to reach your goals anytime soon.
Preferably, decide on three kinds of goals: emergency funds (about 3 to 6 months of essential bills), short to medium term goals (1 to 5 years), and long term goals such as children’s education, retirement and so on.
Talking about these goals often reinforces your shared commitment to meet them.
Set a Budget
Make sure you include all essential costs like bills and groceries in it too. Luxuries like fun and entertainment should also be part of the list. Over the following months, track your spending to fine tune this list with the right allocation of funds for each category.
Start Saving for Retirement
There is no need to wait till you are already halfway there and it becomes a scary prospect. Start saving for retirement together-or in separate accounts-counting on the magic of compound interest to do wonders for your later years.
Tackle Investment Decisions Together
Both men and women have their own approach towards risk: men a little bit more active, while women are more reserved in general. Use this to your advantage and let your strengths complement your financial strategy.