4 tips for managing finances after your wedding
Planning your life together is a special time full of new experiences. While tackling your finances as a couple may not be as exciting as planning a wedding, the decisions you make about money now are key to creating a stable and secure foundation for the years ahead.
Discussing your personal finances, money-management strategies and goals with someone else might feel stressful, but there are steps you can take to make it easier. Keep reading for some ways to navigate the topic of money in your relationship.
Have an open conversation
Before you make any big decisions, it’s important to discuss your individual finances. If you didn’t do this before your wedding, make time for it now. Be as transparent as possible —figuring out your financial priorities as a couple and learning how to have a dialogue about a potentially difficult topic can give you a good foundation for your future.
Consider the following as part of your conversation:
- What is your total income?
- How much do you have in savings?
- What are your assets and debts?
- How do you typically spend your money?
Each of you could keep an eye on your own spending for a month and then have a conversation about your spending patterns
If it turns out you’re both carrying a high amount of debt, it might be time to discuss consolidating your debt with a personal loan from a bank, credit union or online lender.
Before you do so, it’s important to clearly understand the pros and cons of debt consolidation. On the one hand, debt consolidation is a helpful tool for rolling debts into one fixed monthly payment, optimally with a lower interest rate than what you’re currently paying. On the other hand, depending on the length of the repayment term, borrowers sometimes end up paying more interest over the life of the loan than if they hadn’t consolidated at all. It’s up to you to decide if the convenience of smaller monthly payments may be worth the potential extra long-term cost.
Align your goals
Next, think about your financial goals as a couple and how you will get there. What do you want to spend your money on beyond household bills? What do you want to save for — a new car, a down payment on a future home, growing your family, retirement — or all of the above? What types of investments are important to you? How much cash do you want to have for day-to-day spending vs. in an emergency savings account?
Thinking about your finances in terms of short and long-term goals could also be helpful. What do you want to accomplish financially in the next year, five years, or 10 years?
Even if your goals change over time, and they probably will, it’s important to have an ongoing dialogue about your priorities.
Decide how to organize your money
An important part of figuring out your goals is deciding how you want to organize your money as a couple. There are a few different ways to approach this:
- Close individual checking and savings accounts and open shared ones.
- Keep individual checking and savings accounts and open new shared accounts for household bills and savings.
- Keep finances entirely separate and decide how each partner will contribute to household bills and savings.
You’ll also want to consider how many credit cards you have between the two of you. Credit card debt can quickly add up, especially if you’re only paying the minimum amount due each month.
If you’re struggling to figure out how to organize your money as a couple, you may want to reach out to a professional for advice. A financial advisor or counselor could help you prioritize your spending, saving and investing, and strategize for the future.
Create a budget
Once you’ve set out your financial goals and organized your money, work together to create a budget that gets you where you want to be.
Consider what monthly costs you have as a household. Rent or mortgage payments, utilities, groceries, car payments and health insurance are common. Don’t forget about nice-to-haves that are important to you, too — your annual vacation, gym membership or online degree program.
Even if you decide to keep your checking and savings accounts separate, it could still be helpful to have a shared household budget so that you both know how much you’re on the hook for contributing each month and how much you can save or spend individually.
Much like your financial goals, your budget isn’t set in stone. Make time once a month or more often to review your finances together and make changes as needed.
Tackle your finances now for greater peace of mind
Deciding how to approach your finances as a couple might be challenging in the beginning, but it’s important to begin your marriage on the same page. Have an open dialogue, align on your goals, organize your money and create a budget to set your partnership up for long-term success.
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