Saying, "I do," represents the beginning of an exciting, new phase of life. Becoming a couple brings a lot of financial opportunities, but merging finances does require a lot of work initially and it requires maintenance to keep everything up to date. Taking a few basic steps can help you hit the ground running. These are some of the important issues that should be discussed both before and after the wedding:
The big picture
Financial planning is often divided into separate parts, such as investment, estate, and insurance, but they all work together to help you live out your goals. As a couple, you need to decide together as early as possible: long-term career goals, retirement plans, buying a home and so on. Building upon a shared vision will make the individual issues easier in the long-run.
Evaluate your balance sheet
Before you can make any decisions about budgeting, investing or saving for a house, you have to know how much you own and how much you owe. Putting together a combined balance sheet will help you understand your current situation so you can make financial plans for your future.
Determining what investment strategy to follow requires a couple of things. First, you should discuss how much money you will need to be financially secure at retirement. Additionally, you should check your current portfolio and rebalance if necessary. Taking age and overall goals into consideration will help you determine how aggressively you want to invest.
Before you begin implementing your investment strategy, you need to come to an agreement on how much you will spend and save every month. Any big spending decisions should be taken together while you should be flexible about smaller purchases.
Joint or single bank accounts
There are advantages to both joint and single bank accounts. The most important thing is to make the decision of whether or not you want to open a joint account or maintain separate accounts, as a couple. You may also decide to have a joint account for major expenses as well as a pair of separate accounts, but the decision of how much money to put into each account should be mutual.
Buying a home
This is probably the biggest financial decision early on in any marriage and needs to be discussed thoroughly between you and your spouse. Factors such as proximity to work, space for children and/or parents that may be living with you and joint ownership are the primary considerations in making a home purchase.
Life, health and disability insurance are all things you should consider before and after marriage. If the family is heavily dependent on the earnings of one spouse, life and disability insurance may be necessary. You should figure out what kind of insurance coverage your employer/employers provide your family — as you may want to purchase additional coverage.