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Financial To-Do’s Before Saying “I Do”

Why financial planning should be part of your wedding planning.

When my fiance got on one knee in front of the panoramic views of San Francisco, financial planning was not the first thing on my mind. But planning a financial future together may actually be the most important step in wedding planning. 

It’s probably the last thing you wanted to add to your to-do list in the months leading up to your wedding, but finances are a big part of your foundation as a couple. In a recent survey, 25% of millennials reported that finance causes tension in their household, making it the number one source of tension (even dreaded household chores took second place, at 17%). Another study even found that having financial arguments is the top predictor of divorce

The good news is, couples who trust their partner with finances feel more secure and argue less. To start your marriage off on the right foot, you can make it a priority to talk money before heading down the aisle. 

To ensure you and your partner are on the same page financially, here’s a list of questions you can go over. 

How have you dealt with money in the past?

Start with an honest deep dive into your individual approaches to money. This will make you both more aware of each other’s spending habits and how you manage finances. For instance, how did your partner’s family handle money growing up? How much of your monthly income do you save versus spend? What is your risk tolerance (do you take on riskier investments)? You can also make it fun by asking hypothetical questions like, “If you won the lottery today, what would you do with your winnings?”

This discussion will not only shed light on how you both approach money and set financial priorities but also bring you closer together. Getting a better understanding of each other’s financial past will lead to more collaborative decision-making down the road.

Where do we both stand right now?

Once you’re making big purchases together and saving for life events, you want to have a mutual understanding of each other’s financial status as it merges into one. Understanding things like your partner’s salary, and debt situation is crucial. 

Asking about these kinds of things can seem awkward to talk about, but it’s a conversation you need to have so you don’t get caught off guard. Yet many couples do get surprised after they’ve tied the knot — the Bank of America Millennial Money Habits survey revealed that one in five Millennials don’t even know what their partner’s salary is

For starters, sit down together and check both of your credit scores for free using a website like Credit Karma (this doesn’t affect your credit score, contrary to popular belief). It’s also important to share any assets and liabilities you both have, from your salary to your student loans. Once you lay your cards on the table, you can work together to come up with a game plan to tackle your debt (if needed) while saving for what you want and spending on what you need. 

What steps can we take for our future?

Once you have a basic understanding of how you both approach saving (and spending) money, you should tackle the question of what your long-term future together will look like. Which means it’s also a good time to think about protecting that future. This is where long-term safeguards like life insurance, estate planning and retirement savings come in. 

Life insurance, for example, is obviously the last thing you want to think about when you’re in the middle of cake tastings, but it’s a good way to ensure you and your partner are on the same page. Even if you don’t plan on having kids in the near future, you still need to take a look at your current situation. If something were to happen to one of you, would the other spouse be able to take over all financial obligations you currently have without the other’s income? If the answer is no – you need life insurance. 

Once you have those safeguards for the future in place, it’s a good idea to discuss any other plans you might have in the long run, like buying a home, taking care of your parents, or paying your kids’ college tuition. Doing so will help you create a sustained savings plan for those bigger milestones while ensuring you’re both on the same page goal-wise. 

How do we want to handle budgeting?

I’m big on starting with a budget, because it helps you plan for your individual needs, and with your wedding day around the corner, your budget needs to also account for your partner’s needs. 

To create a budget that works for two, start with your wedding planning! When you’re making decisions like how much you want to spend on the venue, how many guests to invite and where you want to go for your honeymoon, a budget will help you plan those decisions. The Knot found that the average cost to get married in the U.S. in 2019 is $33,931 — the highest in the world — and you’ll want to know where all that money is going. 

Beyond the big day, you can budget together by discussing what’s important to you. Do you both love to travel and want to set aside money for frequent trips? How much do you want to spend on hobbies? What about setting up an emergency fund? You and your partner might have different approaches to spending, so talk it out and make sure you’re on the same page (or spreadsheet). 

How will we divide our financial responsibilities?

Have you had the bank account talk yet? You will need to decide whether to combine your accounts into a joint account or keep things separate. The decision is different for everyone since it depends on each couple’s preferences, and both have pros and cons. A joint account gives a clear window into the complete situation so that you can both make decisions together. On the other hand, separate accounts can provide the freedom to make more purchases without feeling micromanaged. And one way to compromise is to have a combination of both — use a joint account for major purchases, but separate spending accounts. 

The reality of finances can hit you hard after the honeymoon is over, so to avoid future arguments, it’s good to divvy up the everyday responsibilities like paying bills.

When it comes to planning your wedding, finances often take a backseat to the flower arrangements. But finance is a conversation you need to have now if you want to avoid tougher discussions later. With the right planning in place, you’ll walk down the aisle with the confidence that your relationship will be stronger than ever.

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