Financial Tips for the Newly Weds
Congratulations on your big and special day. As you start building your life together, the one thing that should be at the very top of the list should be your finances – money. It may not be very easy to have this talk, let alone be honest about it, but it is one that you should have. The earlier you create a finance foundation for your relationship the better and easier it will be for you.
To be specific, you should not keep your partner in the dark about your income, debts or assets that you own as this will be financial infidelity. In addition, you should have an attitude of working together. Schedule for this finance talk earlier in advance and come prepared with pay stubs, credit reports, insurance statements and policies for all accounts. No pointing fingers, just be honest and open to your partner.
Talk though the financial goals, habits and memories
Discussing your past memories of money, like how you parents spent their money and how they reacted to paying off bills, as well as your current and developing money habits (whether or not you live on a pay check or you are a supersaver) is very important. This will hint to your partner what they should expect. Differences should be embraced and talked over as opposed to freaking out.
Look at the numbers
With the financial documents at hand, add up all the assets as well as the debts and find your net worth by subtracting the two. It is at this point that you probably should reveal to each other what you make. If the first tip (finance discussion) was done properly, then this should be less scary. If anything, it should be a relief.
Set financial goals
There are three types of goals: emergency funds, 1-5 year goals and long term goals. The emergency funds include all essential bills due in 3-6 months, 1-5year goals include things such as tips while long-term goals include retirement and child’s payment among many other. You should however ensure that you do not put all your long term finances in retirements accounts as you will not be able to withdraw it without attracting a penalty. While setting these goals, ensure that you are as realistic as possible.