Financial Advice for Engaged Couples
Financial advice for engaged couples can come from many different sources and is a smart step to take a look at this before getting married. It's important to give your marriage the best chance possible by finding out what you can do to be financially healthy.
Financial Advice for Engaged Couples
Should We Reveal All Financial Matters Before Getting Married?
Both partners entering into a marriage should fully disclose their financial status to each other. Whether or not you plan to merge your finances, it is only fair that both sides have an understanding of what debts are owed, how much money is in savings, and even each other’s credit scores. The reason you want to know these things before tying the knot is because your partner’s financial health will have an impact on your life when you both go to apply for a mortgage, try to get auto insurance, or any other application that merits a credit check.
Should We Merge Our Finances?
There is certainly something to be said for keeping finances separate. There is always a chance that a marriage will end in a divorce, and having separate finances keeps both husband and wife somewhat independent. Most engaged couples, however, would prefer to not think in terms of a failed marriage. The important thing is to make sure that you decide on whether or not your finances will be merged before you get married. If you do not make this decision beforehand you may find that your partner had different expectations than you. By ignoring making major financial decisions while still engaged you’re setting yourself up for problems later down the road.
Are You a Spender or a Saver?
Most couples have one person who is more prone to spending money while the other person would rather save money. This is an ideal mix because it makes for a nice financial balance. Identify with your partner which category you both fall into and discuss how it will affect the way you handle money as a couple. One of the best pieces of financial advice for engaged couples is to keep the lines of communication open. This advice serves engaged and married couples beyond finances as well.
Should We Plan a Budget?
Engaged couples should sit down together and create a comprehensive budget. This is an important step that needs to be taken before spending a dime on the wedding, and certainly prior to moving in together. If you already reside with your partner, but do not have a budget in place, you should draft one. This is not a task that only one person should do. Take some time together to plan this so you are both in agreement on how money should be spent. Having a realistic budget in the beginning stages of a marriage sets the stage for a financially healthy union.
Should We Go Wild With Wedding Expenses?
Many engaged couples feel as though a wedding is such an exciting experience that they should spare no expense. The truth of the matter is that many couples wind up carrying so much debt from the weddings that it winds up causing stress on the relationship. Financial problems are often cited as a major cause for divorce, so don’t set yourself up for failure by maxing your credit limits to pay for an elaborate wedding. Compose a budget that is specific to wedding expenses and look for ways to save money where you can find them.
Should We Apply for Joint Credit?
If you are merging finances you may feel as though one of the first steps is to go out and apply for credit cards, car loans, and other accounts as a couple. If you already have sufficient credit, however, you may want to add your partner as an authorized user or as a co-borrower to the accounts you already have. Adding a co-borrower may require a new application depending on the regulations of the lender, but it is certainly preferable to opening a slew of new accounts together while still retaining all the individual accounts you already had.
Your finances should not be kept a secret in your relationship. If you handle finances well together as an engaged couple you may be able to avoid financial hardships down the road.