You’ve planned, you’ve prepped, you’ve walked down the aisle and you’ve said “I do.” Now it’s time for the excitement to settle down and to begin building your life with your partner. Chances are, there’s a lot to tackle in this new phase together, finances included. So where do you begin as newlyweds? Start with these six steps:
- Set S.M.A.R.T. goals. Not sure where to start when it comes to planning your future together? Sit down individually and ask yourselves what you hope to accomplish personally, professionally and financially in the next three, five and ten years. Then come together for a conversation around your answers and work to prioritize what you’ll conquer first. Turn your goals into S.M.A.R.T. goals—Specific, Measurable, Attainable, Relevant and Timely. This will make it easier to track progress.
- Decide to merge or not to merge. Make a decision from the beginning on whether you’ll keep your bank accounts separate, combine all accounts or have some of each. There is no right or wrong answer when it comes to this decision. Separate accounts can allow for freedom and flexibility, while joint accounts can allow for full disclosure. With either path, ensure that the lines of communication are always open on what is happening with your money.
- Put a spending plan in place. When it comes to reaching your financial goals, it will be really tough to get there without first knowing where your money is going. Come together to list out all income and expenses for a month and what you’d ideally like to spend in “fun time” categories such as dining out, shopping and entertainment. Factor in stashing away about 10% of your income and paying down any debts you may have. See if you end up in the red or black after tallying things up and make adjustments where needed. Remember, the more you use your money toward building a life you love, the easier it will be to cut out the expenses that don’t mean much to you.
- Set a plan to tackle debts. If either of you are bringing debt into the marriage, set a plan in place to eliminate it. Will you work to pay down balances as a couple or will you individually be responsible for the amount you’re bringing to the table? Tackle debts by putting all extra money towards the highest interest rate balance first, and when that balance is knocked out, roll all available funds into the next highest balance. This method will help to minimize the amount you pay in interest on your debts.
- Review benefits and make adjustments to insurance. Getting married is considered a qualifying event and allows you to make adjustments to your employer-provided health insurance coverage outside of normal open enrollment periods. Review each of your benefits and determine whose health insurance you’ll elect. Then, take advantage of any group life and disability insurance offered along with flexible spending accounts. When it comes to your cars and where you live, consider bundling insurance policies. Many insurers offer a discount when you combine auto with renters, homeowners or condo insurance.
- Schedule recurring monthly money dates. Scheduling a money date with your partner allows you to come together each month to review savings, spending, and goal progress. And it allows you to have an open dialogue about any changes you may need to make, any upcoming bills or expenses you need to plan for and, most importantly, any wins you need to celebrate! These money dates will help keep you on the same financial page.
Building your financial future with another person can be a big undertaking. However, it can also be incredibly exciting. Having a partner by your side as a cheerleader, accountability buddy and sounding board for ideas will make managing your money as a duo way more fun than you might have expected!