As another summer wedding season comes to a close, many new couples will, for the first time, learn financial responsibility for two. So whether you’re a young couple tying the knot or you found your spouse a little later in life, here are three themes to help navigate this new territory.
Foundations in Communication
Communication around your family finances is a critical for reducing the stress money may cause. Talk with your spouse about financial priorities and major expenses like saving for college, buying or remodeling a home, or saving for retirement. Ask how your family will allocate your savings each month—from building up short-term emergency reserves to saving for long-term retirement. Also consider the timeline of your major family expenses like having kids, paying for college, paying off your mortgage, or going on vacations. If you can plan for these expenses down the road, you can better prepare and save for them today.
Understand the Past
Before marriage, couples often talk about their past relationships, their family growing up, even their childhood friends. But why don’t couples talk about their past experiences with money? We encourage couples to ask questions about their spouse’s financial past. What was it like growing up? Were your parents more savers or spenders? Was your family conservative with their monthly expenses or did you have everything you ever needed? How have your past financial habits reflected on your life today? We are all products of how we were raised. How our parents dealt with their finances often reflects on us—and us onto our children.
Getting Financially Organized
It’s no lie—personal finances can be very complex and confusing. How can you juggle budgets, checking/savings, education, mortgage, retirement plans, investment accounts, insurance—and on and on! That is why getting financial organized early on is crucial for newlyweds (and really everyone). The first step for getting financially organized is to find a trusted advisor to lead you through all the confusion and complexity. Your financial life is far too important to go at it alone. Also, explore tools that can help gather your financial information in one place. At Prosperion, we use a powerful tool called WealthVision®, which collaborates and organizes your entire financial life into one comprehensive dashboard. It provides greater clarity as we plan and strategize toward your financial prosperity.
Most importantly, we encourage all couples to communicate early and often about their finances. If you know of any newlyweds or any couple who might enjoy this week’s Prosper On, we encourage you to pass this along.