Are you getting married soon? If so, you and your future spouse are probably concentrating all of your efforts on your big day and all the organising that goes with this life changing event. The financial aspect of married life is often neglected by couples who are about to tie the knot while all of this is going on. This is a mistake you should avoid because poor financial planning at this stage of your relationship, could lead to serious problems later. Below are 5 financial steps you should take before you say ‘I do’.
1. Talk About Your Financial Goals & Concerns and Prioritise Your Shared Financial Aspirations
When two people decide to get married, they often have different financial goals and aspirations. The lifestyle you lead, when each of you will retire, starting a family and deciding where to live are all key financial decisions that you have to plan and budget for.
These are not decisions you should take separately. Instead, it’s vital to work as a team and address each money-related event or activity that will affect you and your spouse. A simple brainstorming session where you and your partner write down each of your financial goals and concerns will clear the air of uncertainty and allow you to agree on what you want to achieve financially in the future.
2. List All of Your Debts, Assets and Any Other Finance Matters
If you sit down with an Independent Qualified Financial Advisor, they will often ask an engaged couple or newlyweds to produce a net-worth statement. This should include details about each of your existing salaries, debts, what you own and any other financial matters that need to be disclosed. This will give you a much better idea about each of your financial situations.
3. Decide How to Approach Important Financial Activities and Obligations
In some situations, a couple may be happy to create joint accounts for banking, savings, to pay bills and to meet their other financial obligations. However, other married couples often decide to deal with these financial issues separately. Once again, it’s a good idea to sit down and talk with your partner about how to approach this delicate matter.
4. Create a Realistic Budget
The more prepared you are for future situations, the better. Creating a realistic budget that both of you stick to is the best way to achieve this goal. This simple step will ensure that you have more control over your spending and will also make your relationship a much more harmonious one.
Budgeting is not a one-off activity. You and your spouse should agree to discuss your finances on a regular basis and assess and modify your budget when it’s necessary. This will help you avoid any nasty surprises in the future and will reduce the likelihood of any conflict with your partner over money problems.
5. Estate Planning and Management
Nobody knows what the future holds for us and most people don’t want to think about the worst-case scenarios that could occur after they get married. However, you should seriously consider seeking financial advice about how to look after your family in the event of untimely death or illness of either spouse.
It is critical to ensure you have the right cover in place that best suits your own individual circumstances and budget that will give you financial peace of mind into the future. You should also give serious consideration to making a will and creating other legal documents that will help you and your family if things go wrong in the future or you are no longer able to act on your own behalf.
Money problems are one of the main reasons for conflict in marriages today. In many cases, the situation ends in separation and even divorce. However, if you address the financial aspect of your relationship as soon as possible and follow our financial tips for newlyweds above, you will avoid many of the problems that affect hundreds of Irish couples.
Make Fahey Financial Solutions the third person in your marriage to help steer you financially as you begin your journey of life together.