Marriage is arguably one of the biggest and happiest events in many people’s lives. Those rose coloured glasses are in full effect when we are in love and joining our lives with another. There are a few simple things you can do financially to keep the bloom on that rose.
Number one is communication. It is extremely important, from the get go, to be brutally honest about your past and current financial life, and what you ultimately want your financial lives to look like together. If you are coming into a marriage with debt, then you need to disclose that, and whether it has affected your credit rating.
Agree to build your credit scores together by each having a credit card – one that you pay off in full every month. This will go a long way to having a healthy credit rating so that when you buy a house or other large ticket item together, you will get the lowest interest rate possible.
Talk about your financial priorities. Develop some short and long term goals together and use your weekly financial discussions to monitor your progress. If one person’s priority is to buy a house but the other wants to buy motorcycles, speedboats and fancy cars or designer clothes and shoes, then a compromise has to be found. Working with an advisor can help find a middle ground.
There is no one correct way of paying your new combined household expenses that works for every couple. Some people split expenses 50/50, some select specific things to pay – one pays the mortgage and the other the food & taxes for example, and many couples simply have one joint bank account and all money is shared, and with that – expenses are paid from one common place. The important thing is to check in with each other on a regular basis.
Set up a joint emergency fund and each contribute according to your ability. If an emergency occurs like a job layoff or major expense, your plans are less likely to be railroaded when you have adequate savings in place.
Lastly, if you are entering a marriage where there is an imbalance of assets, it is highly recommended that you visit your lawyer and have a prenuptial agreement or marriage contract drawn up. I know it’s not romantic, but this ensures that you build your lives together from the same starting point. What you accomplish from here you can celebrate together and this can only strengthen your relationship. If your marriage is a second or third for you, be sure to re-write your Wills and Powers of Attorney while you are at the lawyers. Marriage nullifies any previous Wills.
Linking your life with someone else through marriage is a wonderful time of your life. With a little planning and a lot of communication you can keep your financial lives on the path to a long and happy future together.
Interesting that a new marriage nullifies your present will