Striking a wonderful balance in the case of monetary matters is difficult for married couples. One may be a spendthrift, while the other a complete saver. Whatever is the situation, it is always necessary to decide whether a pooling of the funds is more necessary than keeping the funds separate. This requires a lot of discussions, trials and errors and sometimes even disagreements to settle down into a final decision that both will comply to. So, in order to act early, here are some tips that will help you to wisely take good decisions about managing your joint finances as newly-weds.
Have An Open Discussion About Each Other’s Finances
Discuss each other’s monetary matters even before you are married. Talk about how you’ll want the money to be handled and what debts you carry. Discuss about household budget, retirement plans, vacation expenses, and kids’ allowances too. Create a very relaxed and friendly atmosphere when such discussions are brought up, where both should consider each other’s viewpoints.
Note Down Your Financial Goals
Discuss your long term financial goals in detail. List the actions you will take to achieve these financial goals and the time required to do so. Set rules and best practices to govern what methods will be adopted for investments, how regular household bills or utility bills will be divided, and how both will handle financial emergencies.
For families with a single earner, it becomes much easier to manage expenses if the spouse of the primary earner can start a side-job that doesn’t take much time. For example, anybody could earn something like $150-200 a month by spending a few hours a week on filling paid online surveys. Some online paid survey websites offer payouts without minimum thresholds, which is even better.
Try Having A Joint Account
This is a perennial debate about whether married couples should merge their bank accounts or maintain accounts separately. Having a joint account after marriage makes it easier to track your financial health as a couple. This practice also acts as a symbolic gesture of each other’s financial unison. Even, some legal affairs could get streamlined with joint bank accounts. The demise of one of the spouses will help the other to retain access to the joint account without referring to a will or going through the hassles of a legal recourse to get the money.
Change Your Beneficiaries
Do this immediately after marriage by updating your beneficiaries on all your investment accounts, savings accounts, or employee sponsored retirement accounts. If any untoward incident happens to the main earner of the family, the other spouse should inherit all these assets quite smoothly. Share this beneficiary information with each other so that both are up to date of all the financial assets and the inheritance one will have if any one passes away.
Make Or Update Your Existing Will
When you do not know what the future has in store for you, always make a will or update one to include your spouse as the inheritor. Consult an expert lawyer, so that you know all the aspects to discuss. You will also need to revisit and update your will every few years.
Evaluate Your Insurance Coverage
Sit down and assess your insurance policies to check any under coverage, duplicate coverage or any lapse periods. You have 30 days after marriage to add your partner as a dependent without providing any evidence of insurability. Find a good health Insurance plan that will work for both.
Develop A Budget
Make a review of your joint expenses to see how much both are spending and where you can cut down your expenses for maximum impact on savings. The little savings you accumulate by abstaining from mindless expenses will help you face sudden expenditures. Try the envelope budgeting system that helps young couples to be careful with their overspending.
Share Money Management Responsibilities Equally
Both husband and wife should take equal participation in money matters, budgeting and payment of bills. The onus of proper management of finances should be on both. Moreover, leaving all money management matters to the bread earner leaves the other spouse clueless when that partner faces disability or demise. Bills go unpaid, debt accumulates, and a solid financial position slowly deteriorates.
Save For Rainy Days
Set aside at least 10% of your income for any emergency fund. It is necessary to save and cut down gradually on the unnecessary expenses because your family will grow in future. If you are not comfortable with 10% contribution initially, start with a small percentage but see that you gradually increase this figure to at least 20%.
This is one of the most important elements of a happy marriage. Even if it is a financial mess up, see that you own up your mistake to your spouse. Blaming each other for the mistake made will only lead to long term conflicts and huge repercussions too. Also trust each other in these financial matters. Do not always judge each other or question about the expenses made daily. Keep a close check and rectify each other’s mistakes made in money management in a respectful way.
Calculate Your Joint Net Worth
This will help you to get an idea of each other’s financial status. Make a calculation of your combined assets and debts to get a clear picture of your financial position. In simple words, add up everything you own from the value of your house to your bank balance and then subtract this from the value of your debts, that may include a mortgaged car, student loans or even credit card balances.
You may always not be eye to eye on all financial matters after marriage. But it is always essential to respect each other’s feelings when it comes to monetary matters. Recognize both your viewpoints to be reasonable and agree on investing in common financial grounds to maintain a cordial relation with one another and equally enjoy a sound financial position forever.