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5 Things Every Couple Should Do with Their Finances Before Saying I Do
Financial Planning
Date: 5 Oct 2021

5 Things Every Couple Should Do with Their Finances Before Saying I Do

Whether you’re marrying your girlfriend, boyfriend, or any other gender friend, getting married is exciting. As long as you’re marrying your best friend, it’s a reason to celebrate!

But planning a wedding is stressful – there’s so much to do! And if you’re part of the LGBTQ community, you may find yourself doing double-duty as you incorporate your values and identity into a once-traditional ceremony.

Throwing finances into this mix only fuels your stress if you and your beloved aren’t on the same page. That’s why it’s wise to hash out your finances before you get hitched (and even bring a financial advisor onboard to arbitrate more delicate issues). So before you head off on that well deserved Honolulu honeymoon, take a minute to focus on your finances and…

1.      Discuss Your Priorities

Knowing where your (and your partner’s) priorities lie is key to building a healthy financial future. If you haven’t yet, it’s time to sit down and discuss what’s important to both of you, like:

  • Retiring early
  • Traveling
  • Starting your own business
  • How you should (and want to) spend, save, and invest your money

You’ll also want to consider growing your family. If neither of you wants kids, that’s a quick conversation! But if you both want children, now’s a great time to talk about funding that future, including the possibility of IVF treatments, donor insemination, surrogacy, or adoption.

Remember that none of these questions have “correct” answers, and it’s okay to have differing opinions. The key is calm, honest communication that brings you to a healthy compromise for your lifestyle and needs.

2.      Disclose Your Debts, Assets, and Obligations

In addition to hashing out your priorities, it’s crucial to understand what each partner brings to the table – waiting to tell your partner about your enormous debt or rock-bottom credit until after the ceremony is begging for a fight.

Instead, even if it’s difficult, it’s better to be honest up front. You can start by putting together a net worth statement outlining:

  • How much you make from your job, government benefits, and passive income
  • What you currently have in your banking, investing, and retirement accounts
  • Any current debts
  • Ongoing obligations like rent, child support, alimony, or parental care
  • Plans to accrue more debt, such as buying a car or going back to school

Examining your finances clearly can help you make goals and tackle problems now – together.

3.      Talk About Your Goals

Once you’ve outlined the nitty-gritty details of your priorities and financial circumstances, you can start setting goals and making plans for your future. Consider both individual and joint goals that impact your finances, such as:

  • Paying down debts
  • Education and career ambitions
  • Where you want to live
  • Whether you prefer to rent or buy
  • Funding your retirement accounts
  • Merging, buying, or investing in property

Again, there are no incorrect answers here – but there are incompatible ones. Communication, compromise, and honesty are crucial!

4.      Make a Joint Spending Plan

Now that your priorities, debts, and goals are on the table, you and your partner can take a break, have a cup of tea, and whip out that calculator to build a spending plan. How you decide to spend your money can reveal what is important to you. Outlining where your money goes before you get it can help couples avoid fighting about taking on new debts or overspending on nonessentials.

To start, you’ll want to calculate your current income, including how often you’re paid and what you can reasonably count on making in a given month. Then, outline how much you pay for:

  • Set expenses such as your rent or mortgage, car payments, and other debts
  • Variable essential expenses such as groceries, clothing, utilities, and transportation costs
  • Nonessential expenses like subscription services, clothing, dining out, and holiday gifts
  • Investing and saving for emergencies and retirement

Note that, if you haven’t yet combined some expenses – for instance, if you’re not living together – your expenses may fluctuate after your big day. That’s why many financial advisors suggest regularly revisiting your spending plan to adjust your finances to your current circumstances.

5.      Consider a Joint Bank Account

Even if you aren’t living and spending together, opening a joint bank account can help you prepare for your future. While every couple caters their bank account structure to their lifestyle, it’s often wise to have anywhere from four to six accounts between the pair of you, including:

  • A joint checking account
  • A joint savings account
  • Individual checking accounts
  • And even individual savings accounts

Additionally, you’ll want to discuss how you’ll split your financial obligations to this account. Will you share responsibilities 50-50 or divvy up your expenses according to your income? Who’s in charge of paying the bills? What counts as a “joint expense?”

Combining finances for joint expenditures, such as rent, childcare, and saving for a house allows you to make the most of your finances. Plus, having your rent and grocery bills come out of one account makes it easy to tally up your monthly spending.

At the same time, having your own funds can provide peace of mind that you have a separate nest egg or spending budget. While discussing large, joint purchases is a good idea, you shouldn’t have to account for every $4 coffee you grab before work.

Before You Get Married, Talk to a Financial Advisor!

Talking about finances can be thorny for couples of all descriptions. And if you’re part of the LGBTQ community, you might be unsure where you can safely turn for sound, personalized financial advice. That’s where the fabulous and loyal team at 3 Financial Group comes in. No matter your gender, orientation, or financial situation, you can always contact us with your questions and financial needs.

As fee-only fiduciaries and genuine supporters of you living your best marriage, we’re legally bound to keep your best interest in mind when providing financial advice. Whatever love looks like to you, we are excited you have chosen to say, “I Do” and look forward to helping you prepare your finances for your wedding day, and every day after.

 

 

 

Author:
Joanna Amberger