Marriage shoud be considered as an important part of financial plan. It involves the integration of a pair of individual lives and everything that comes with them. Finances are a major element of this integration, and unfortunately, they can be quite troublesome to get a handle on – especially for those who are newly married.
To complicate matters even further, when meeting suitors for the first time, many couples don’t think about etablishing a good financial plan for their new life. Others don’t even think about financial compatibility. Consequentially, when financial integration is necessary, the two spouses may be at odds. Tempers may ensue, and revelations about one spouse’s debt or spending habits may be exposed.
To bypass these post-honeymoon surprises, consider the following financial mistakes you should avoid before tying the knot.
1. Lacking a Financial Plan for the Long-Term
You must have a financial plan, and it must entail long-term considerations. Your plan should be comprised of goals for homeownership, retirement, and beginning a family (assuming you intend to have children).
Have a conversation about money management subjects before planning your wedding. Talk about what your goals are financially, what your budget is like, and the timeframe you set to achieve them (among other issues you may potentially face). A financial plan should be in place well before you say, “I Do.” And always remember that you don’t have to appeal a finance advisor in order to set a financial agreement between you.
2. Dishonesty with Your Spouse
Hiding finances before the marriage can result in serious financial problems.
Ensure that you both disclose all financial matters and openly discuss your existing financial circumstances. If anything feels off during this conversation, a red flag should go off in your head. Counseling might be necessary before marriage is on the table.
3. Going in Blind without a Clear Personnal Finance Vision
One common mistake newlyweds make is going into a marriage blindly. In short, some couples don’t have discussions about financial goals, debt and income.
Before an engagement, talk frankly about money. Your conversation should address existing debt and savings, credit score, bankruptcies, delinquent debts and other monetary obligations each partner has.
This conversation could make or break your relationship, but not having this conversation could be worse for the both of you. Neither partner should be blindsided when finances are combined, post–marriage.
4. Integrating Finances Before Marriage
Married couples are protected by a number of laws. If the two of you simply live together, problems may come up in the future if you decide to buy a home or combine the debts you both have, especially if a breakup ensues. It is prudent to combine finances after your wedding.
If you live together before getting married, it is worthwhile to abide by some sort of budget where each one of you contributes to common expenses. You will both be protected by fairly sharing expenses. However, when significant financial commitments are necessary, some separation is imperative. You are encouraged to wait until marriage before combining each other’s debts.
5. Putting the Wedding or Honeymoon Expenses on a Credit Card
The last thing any couple wants is to begin a life together with debt on their shoulders. You should consider paying for your honeymoon and wedding with cash. While this could entail tightening your belts, but the ends justify the means, as you won’t have to worry about lingering payments burdening you for months (perhaps even years), post-marriage.
By seeking out deals ahead of time, you will still have the ability to have a budget-friendly and beautiful wedding. When planning ahead, it is easy to find affordable honeymoon deals.
6. Not Budgeting
Becoming financially successful starts with having a budget and sticking to it. The amount of money you make is irrelevant if you lack a plan to follow, one that can help you regulate expenditures. If the two of you do not put together a budget in unison, then financial success won’t be possible.
When a budget is created, financial priorities will be the responsibility of both partners. Those responsibilities might be drastically different. It is imperative that each party participates and is open to compromise.
Managing this problem shouldn’t entail micromanaging a budget or doling out allowances. Rather, the two of you must work together in order to create a budget which benefits the family. A financial planner or a planning class may help you simplify things if this proves difficult.
7. Separating Your Finances After Mariage
There are several worthwhile incentives to keep finances separate, post-marriage. If severe overspending or gambling are problems that one spouse has dealt with before, some trust might need to be established before money is combined. For the most part, though, financial integration and working on a budget together will allow you to work toward whatever financial goals you have more easily.
This entails a lack of hidden credit cards, poor spending habits, or savings accounts. The two of you should regularly sit down and ensure that your financial goals are being reached. If one spouse is unwilling to combine finances, then they could possibly be concealing a larger issue.
8. Neglecting Financial Warning Signs
Financial warning signs should not be ignored, and love should not influence tough decisions you might have to make.
For instance, be mindful of problems like overspending, avoiding financial discussions, or low credit scores.
Understand that no one is perfect, and mistakes are made by just about everybody. If one partner has endeavored to fix financial mishaps from the past, it shouldn’t be held against them. Instead, continue being proactive and vigilant.
9. Not Working in Unison
Getting hitched means that you two are now a tag-team, and that means sharing financial plans and goals.
Although one partner might pay the bills and handle daily finances, each of you must participate in budget discussions about expenditures every week. You should both monitor spending habits and track savings closely. And for a better financial planning, your investments and checking accounts should be monitored just as closely. No financial surprises should ever blindside you or your partner.
10. Buying Everything New
Learn more about financial planning here :