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Getting married is one of the most significant decisions people make. Becoming partners with someone else changes nearly every aspect of life. However, when contemplating a life together with your significant other – the wedding, the honeymoon, and everything else that comes next – one facet of married life that people often brush past is finances. That’s unfortunate.
Managing money as a couple, while seemingly a mundane task, is extremely important. Failure to discuss finances together as a couple can have serious ramifications. After all, money is one of the top things married couples fight about. However, you can avoid arguments about money, and even make your joint finances a source of strength in your marriage. Here are five great tips to help you manage money as a couple.
1. Talk about Your Money Habits
As early as you can, your spouse and you should talk about your finances. You should both discuss the individual debts you’re bringing into the marriage, assets and investments you own, how much you money you make each month, and all of your recurring bills. You both should also discuss how you’ve managed your finances up to this point. This should be a very open, honest discussion; neither of you should hold anything back, especially if you have any past financial issues that may affect the marriage.
Once you’ve both laid everything out, you should look for common ground; what aspects of your finances do you handle in the same manner? Next, you should determine if there are any major differences – how you manage debt, pay bills, and so forth – that must be reconciled now that you’re married. Finally, you should identify any significant financial problems such as bad credit or high debts that you must address early on in your marriage. Doing all this will help you lay a foundation of trust when it comes to money.
2. Develop Financial Goals
Once you’ve both shared truth on your finances, it’s time to discuss your goals as a married couple. What do you want to save, invest, or purchase over the next five, 10, or 20 years? When do you both want to retire? How much do you want to work? When discussing your mutual financial goals, you’ll often find that they align closely with your overall goals in marriage and life as well. Once you establish some clear financial goals, you’ll have a better understanding of how much you’ll have to earn, save, and invest to achieve them.
3. Set a Budget
You’ll need a plan to achieve your financial goals, and that plan is a budget. There are many different ways to set and manage a budget. You should choose a budgeting technique that you know you’ll have the time and energy to commit to. Your joint budget should capture everything: all the money coming into your household as earnings, all your debts and bills, and the funds you’re allocating as savings and investments. Additionally, make sure your spouse and you both agree on the budget management technique you use. Your budget will help you steer your way toward achieving your financial goals; it’ll also help ensure you pay all your bills each month.
4. Assess Progress
To manage money as a couple, you need to come back to the process repeatedly in order to get it right. You should plan to discuss your finances at least once a month; both of you should sit down and ensure that you’re aware of all the bills for the month and of any additional income earned that needs to be allocated. Doing so will help you both avoid unfortunate financial surprises.
Additionally, every three months or so, you should take the time to assess the progress you’re making on stated financial goals. If you’re on track to achieve them, this could end up being a very short meeting. However, you may find that your current financial situation makes it unlikely that you’ll be able to achieve some of your goals. If that’s the case, you may need to revise your budget or reconsider your long-term financial objectives.
5. Leverage Technology
Since you’re getting married in the 21st century, you should definitely take advantage of the many technical innovations that are out there now to make managing your finances easier. A bill-paying service will make it easy to track and pay your rent, utilities, car payment, and mortgage in a matter of minutes. Budgeting apps will simplify managing and tracking all your bank accounts and credit cards. Other apps, such as Venmo, will help you pay for things without ever having to carry cash or reach for your credit cards. The easier it is for you and your spouse to manage money as a couple, the better.
If you’re a newlywed, or planning to marry soon, consider these five tips as soon as you can. Doing so will help you establish a solid foundation when it comes to your finances. Managing money, often a point of contention, can be a source of strength for a married couple if you play your cards right. What are your tips for managing money as a couple?