Avoid financial infidelity when you marry by never lying to one another about money. Tackle combining your finances before your wedding day, beginning with a few frank conversations about your salaries, work benefits, insurance, and debts. Also, tell each other the truth about any events in your past that could influence your financial future, such as driving under the influence (DUI) or driving while intoxicated (DWI) charges.
Create a Budget Together
The budgeting process lets you know what you’ve got to work with and how far it needs to go. Plug in your salaries and any passive income streams, then list every bill either of you has. Reduce your bills by combining accounts, such as canceling one Hulu or Netflix subscription.
Use the 50/30/20 budget method to get ahead financially more quickly. Devote 50% of your income to living expenses and paying bills, including housing. Spend 30% of your monthly income on wants, such as new shoes or football tickets. Set aside 20% of your monthly earnings for savings.
Combine Big-Ticket Costs
Compare each spouse’s health insurance and other policies each person’s work provides. According to Web MD, each person should visit the dentist every six months. Not all dental insurance plans cover that frequency of visits, so consider factors such as these in your plan comparison, too. Determine whether moving one spouse to another’s insurance policy would save on co-pays and premiums, and if so, do it!
Many websites encourage newlyweds to combine their auto insurance, but before you try to do this, discuss your driving records. In most cases, getting married lowers your premiums, but if you combine auto insurance and one spouse has a DUI or DWI on their driving record, it can drive the cost of premiums up. Some couples save more by keeping their insurance separate until the poorer driver regains their license points.
Set Future Goals
Do you dream of a trip around the world or home improvements? Budget for this long-term goal at the outset of your marriage. According to Forbes, 82% of U.S. homeowners want to update their outdoor living spaces since the pandemic, so you’re not alone in wanting to upgrade your home. Get ahead of other homeowners by creating a savings account for your project and making regular deposits to it.
Create a Joint Bank Account
Couples frequently maintain their separate bank accounts, but many open a joint account, too. Each month, each spouse moves a specified amount of money into the joint account for bill payments. Using this method makes paying bills simpler and ensures that neither spouse needs to change their automatic deposits for their pay and other disbursements.
Making Major Purchases Together
When you buy an automobile together, it needs to serve both parties’ needs. Consider all aspects of your purchase, including vehicle mileage, cargo capacity, and service intervals, typically expressed by two things: mileage or time. Many manufacturers now cover the first year to three years of the manufacturer’s recommended service, so include this freebie in your cost calculations. Consider how you can finance the purchase, examining the interest rates and requirements of both spouse’s financial institutions.
Updating Each Other and Your Budget
Don’t treat your household budget like a once-and-done item. You need to revisit it each year to update your salaries, subscription costs, and goals as a couple. Open, honest conversations about money before marriage can help create a better environment during marriage. Keep the lines of communication open, updating each other and your budget.
Combining your finances can help newlyweds save money and achieve joint goals faster. The process takes time and effort. Set aside a few hours each week before the wedding to plan how you’ll combine things. Once you marry, you can quickly set up accounts and combine insurance, subscriptions, etc.
