Starting a life together as newlyweds is an exciting journey - but it also brings a level of financial responsibility you may not have experienced before. Here are some tips to help start your married life on solid financial footing:
1. Assess Your Combined Financial Situation. Put everything out on the table when it comes to each other’s finances. With the average American getting married around the age of 30 it’s very likely that you and your spouse will each come to the marriage with a complex financial profile. This could include savings, credit card and student loan debt, retirement accounts, and possibly even a mortgage. You should have an open dialogue about each of your credit histories, income levels, and debt obligations. It’s also important to discuss your lifestyle expectations and money habits. If you are a spender and your partner a saver, you'll want to find some balance so that neither of you feels deprived or financially unsafe.
2. Set Joint Financial Goals. It’s imperative for you and your spouse to discuss your future financial plans. These could include homeownership goals, career aspirations, retirement planning, and building a family. But don’t only focus on long-term financial goals. Short-term goals are just as important. You may want to prioritize building an emergency fund, paying off credit card debt, saving for a down payment, or establishing joint bank accounts. No matter which financial goals are important to you and your spouse, it’s important that setting them and planning for them no longer happens on an individual level. Open communication surrounding financial goals can help to promote financial stability in your marriage.
3. Create a Joint Budget. Even if you and your spouse decide to keep separate bank accounts, it’s important for you both to collectively understand how much money you have coming into the household and how much money is going out. You can use a spreadsheet or budget calculator to outline your combined income streams and monthly expenses. If you find that your budget is too tight, have a discussion about which expenses you could cut back on. You should also come to an agreement about how to handle any extra income leftover once expenses are paid. Extra income presents a great opportunity to build your savings as a married couple, but it’s important that both you and your spouse feel heard in financial discussions and that big financial decisions are made as a team.
4. Manage Debt Together. If you or your partner has a significant amount of debt, you should outline a plan to address it. Working collectively to pay it off could help to improve that partner’s credit score, making it easier for the two of you to secure a mortgage or car loan down the road. If one partner’s debt is extensive, or their credit score is extremely low, you may consider having the spouse with the stronger credit history take out a mortgage or loan on their own. No matter what arrangement makes sense for you and your spouse, the important thing is to be on the same page about existing debt, and that you work together to ensure it doesn’t get in the way of your collective financial goals.
5. Discuss Your Finances Regularly. Set aside some time at least once a month to review your joint budget, evaluate debt repayment, and see where you’re at with your financial goals. Having regular, open dialogue about your finances will help to ensure that there are no nasty surprises and can help you address potential budgeting shortfalls before they become a problem.
Working together with your spouse and maintaining financial transparency can help you reach your financial goals as a married couple. Staying on the same page regarding your household budget and ensuring that you both have a say in important financial decisions can go a long way to creating a harmonious partnership. Whether you’re looking to set up a new joint checking account, establish a dedicated savings account for your financial goals, or seeking advice about home lending or long-term retirement planning, we’re here to help!