The view of marriage varies from generation to generation and from person to person. The rate of marriages has drastically decreased with the millennial generation. Pew Research determined this was due to three factors: not ready to settle down, not financially prepared, and haven’t met the person they want to marry. Finding a life partner can be a challenge, but so is money management. If you or someone you know is preparing to leap into marriage, it’s essential to complete these vital financial tasks before the ceremony.
Know Where You Stand Financially
Find out where you stand financially by completing a wellness assessment before sharing with your significant other. Your financial wellness assessment should include a few necessary components, such as a net worth statement and your most recent expenses. Complete a spending plan so you can direct your money where you want it to go in advance. It’s also important to measure your general savings, emergency savings, and your debt to income ratio. Incorporate all of these components to gauge where you stand and then assess your overall financial attitude and confidence in money matters.
Formulate a Debt Plan
Debt is a burden that many of us would be happy to no longer carry. Many couples will wait to marry until their student loan debt or personal loans are paid off or significantly lowered. While you do not need to enter a marriage debt-free, having a reduction plan before you walk down the aisle will bolster your financial confidence. It is also crucial that couples spend some time discussing current debt obligations and establishing a plan to reduce them as quickly as possible.
Share Your Financial Story
A large percentage of individuals find the task of discussing finances with a fiance daunting. While it may seem less than ideal, discussing this important matter establishes trust and requires honest communication. This is not a moment to dwell on the past. Instead, this is an opportunity to bring financial issues to light and discuss how you will make financial decisions together moving forward.
Schedule Money Talks
To avoid money become a sore topic in your marriage, plan regular talks to ensure you continue communication about your finances. These don’t have to be boring or judgmental conversations. They can include discussing items such as future vacation plans, the pros and cons of renting or buying a house within the first few years or marriage, and so on.
Develop a Management Strategy
Developing a money management strategy as a couple is vital before you walk down the aisle. It may be helpful to establish a joint checking or savings account to contribute to your wedding and honeymoon fund. It’s also important to address how each of you handles your financial decisions on a daily basis. This will ultimately assist you when creating a financial game plan and whether or not you should consolidate your accounts, or keep them separate.