While money is a primary cause of marital strife, a current Ameriprise study found that nearly seven in ten couples say that they have great financial communication. Before wedding planning kicks into high gear, make discussions about your finances a priority. Taking the time today to speak through money matters can create a good foundation for the collective future. Use the following six principles to direct your money discussions:
1. Open-minded. Listen carefully to what your prospective spouse says is important to them. If your expectations do not match up, try to find a compromise. Some couples sidestep discussions about money to prevent feelings of hurt, fear, anger or remorse. Creating a habit of regular communication might help you avoid heated arguments, and can help ensure you are on the same page financially before you walk down the aisle.
2. Honesty. Share the specifics of your financial history and current situation in case you have not already done so. Your future spouse deserves to know whether you’re paying off college debt, or if you’ve made any financial mistakes in the past (and how you have rectified them). Disclose the good news, too. Divulge details about savings you have tucked away or a family trust that helps supplement your income so you know the sum of where you stand.
3. Forward-thinking. Once you’ve shared your present situation and history, discuss your goals for the future. Be open about what your fantasies are, but you should be ready to compromise. While you don’t need to agree about everything, having shared goals (purchasing a house, saving for college if you choose to have kids, retirement, etc.) allows you to combine forces on savings and gives you a road map for spending.
4. Cooperation. To avoid any miscommunications as newlyweds, talk and assign responsibility for financial roles. Is one of you at monitoring online accounts and paying bills? Are you both enrolled in a retirement account and taking maximum advantage of employer contributions? Who will be the principal contact for your financial adviser, tax professional or estate planner? Two is better than one if you are ready to divide and conquer financial tasks, but be sure you’re both in the loop on key decisions and money matters.
5. Diligence. It takes discipline, but taking good care of those housekeeping tasks right away protects you in case something unexpected happens. Several Actions to consider:
• Consider combining your bank account if it makes sense for your situation.
• Update or write your own will and estate plan to reflect your collective wishes.
• Amend your tax withholdings, to ensure the perfect amount is withheld from your paycheck that you’re married. Consult your tax professional before making changes.
• Choose your wellbeing insurance. If both of your companies provide health insurance, carefully assess your coverage options and premiums for the best fit.
Like most things worth attaining, preparing for a life of financial compatibility takes work. In the event you and your prospective partner can commit to the identical money values, it might help you make a solid financial base.