You’re getting married!
Apart from the extensive wedding plans that go into the process, there are several discussions you’ll need to have with your spouse-to-be about your financial planning. A study found that all married couples argued over their finances at least a month.
So, before you walk on the aisle and tie the knot forever, consider having a meaningful conversation with your significant other about the financial considerations you need to make before you get married.
Having them in mind before hand will give you a surefire path towards financial success.
Retirement Planning
For several people, retirement planning is the first aspect to think of when they get married or get a new job. This involves a lot of careful investing (if you know how), and diligent saving. A general rule of thumb is the 20/50/30 rule. This rule states that you put 20% of your earnings into savings, allocate 50% for necessities, and leave 30%for towards secondary expenses.
For a newlywed couple, ignoring the savings aspect can seem enticing since retirement can seem pretty far off. But remember, the earlier you start saving for your retirement the better! When you start earlier, compound interest can help you accumulate a lot more. Make full use of the tax break strategies, invest in different mutual funds and bonds or hire a financial advisor if you can’t do this yourself.
Current Loans And Debts
Take time and understand your partner’s existing state while you explain your side to them completely. With this strategy, both of you can go through common debt problems like credit card debt, student loans, mortgage payments, or car loans. After you’re married, the loans will only impact the holder, but this will affect how the both of you allocated your resources.
In an ideal world, a couple gets married with as little debt as possible. However, nowadays, most couples enter their marriage life with pre-existing debt. Debt is normal and almost everyone has a loan to pay. What’s important is that you have a way of eliminating your liabilities in the most efficient way possible.
Moreover, you must also consider the future loans you’re going to take on. Are you planning on applying for a mortgage in the upcoming 5 years? Discuss every factor with your loved one and then make an informed decision.
Budgeting
Once you have a way of getting rid of your liabilities, discuss budgets. Be open about your spending habits from day one. When everything is laid out, making a financial plan becomes a lot easier. Problems can usually arise when one person isn’t much of a spender, while the other splurges.
When people don’t discuss such problems upfront, a newly married couple may find themselves constantly arguing about money. To ensure this doesn’t happen, there are various financial considerations you need to make before you get married.
Wrapping Up
Problems related to money often mature to become leading causes of divorces in the long run. By having all the relevant discussions before you get married, you can save yourself from this problem! Go through the abovementioned information again to clarify any doubts that you may have before you tie the knot.