As you prepare to say "I do" to your partner, you have a lot of planning to do for the future. But if you're not careful, you could derail that future by failing to plan your finances well. Prevent emotional and financial problems by avoiding these four mistakes.
Not Being Open About Debt
Many Americans have debt of some kind, but it's often considered taboo to talk about it. Failing to disclose the debts and spending habits of both parties can cause serious friction between couples as they join finances. Everything will eventually come out into the open, so get on top of it before you sign that marriage license. Schedule a meeting together to calmly go over all outstanding obligations, sources of income, taxes owed, and credit histories. Make a plan to work with whatever you find.
Not Planning Together
No matter how you plan to manage your day-to-day finances as a couple, you need to start planning for the future together. Even if you meet with a financial planner on your own, meet with them as a family too so that you can agree on shared goals as well as ways to reach those goals. Prioritize shared goals so you can start thinking and working as a team.
Joining two separate finances, spending methods, and accounts into one can be a recipe for a budgeting disaster. You don't want to spend your first year together arguing over who spent what and how to pay the rent. So, come up with a shared budget plan that separately meets the financial and independence needs of both individuals while also providing for a shared budget for household expenses.
Not Doing Estate Planning
No couple who is about to embark on a new chapter in life wants to discuss death, but it's necessary. Anything could happen at any time, so you need to have your financial plan for your new spouse in place. Change beneficiaries on all accounts that you want to go to that spouse, including retirement accounts, bank accounts, and personal assets. Write a new will. Move selected assets into joint ownership and discuss your plans with your spouse so they know what to do in the case of an emergency.
Get started on your new financial life as a family by meeting with your financial planner today. He or she can help you create goals, make a timeline, and ensure that no estate planning is left out. When financial planning is out of the way, you can then get back to enjoying being with the love of your life.