Marriage is a huge commitment and requires quite a bit of preparation, especially financially. Not only do you have an expensive wedding to pay for, but you will soon have a mortgage or rent, utility bills, car payments, and more. Even if you were paying those already, you now have payments for two. In the 1950s, the median age for marriage was 23 for men and 20 for women. In 2004, it rose to 27 for men and 26 for women. It makes sense considering how financially prepared you have to be today.
This all may sound daunting, but it’s really not so bad. Here are some helpful tips to help you get financially prepared for marriage.
Get ready to share
Before you get married, you need to share all your secrets, especially your financial ones. You’re going to be legally bound to one another, so your debt becomes your partner’s debt, your partner’s assets become your assets, etc. A TD Ameritrade survey discovered that 38% of couples were only somewhat aware of their significant other’s debts, and 43% of people don’t even know how much their partner makes. A survey from the National Foundation for Credit Counseling revealed that 70% of adults had negative thoughts and feelings about discussing money with a fiance. For the sake of your marriage, don’t hide your baggage.
Set up a communication plan
When you’re married, your choices are going to affect your partner and vise-versa. This is especially true when it comes to your financial choices. You should set up a plan with your partner on how you’re going to handle large purchases. Roughly 36% of partners do not talk to each other about large purchases, and one in five people in relationships admit to spending $500 or more without telling their partner. This isn’t a great practice for your marriage. Decide on a dollar amount that either of you can spend without consulting your partner first and stick to it.
Build an emergency fund
An emergency fund is a lump sum of money that the two of you set aside in case of an emergency. For example, what will happen if your car breaks down? On average, the national cost to repair a car is $356.04. Will you be able to afford that? Only 39% of survey respondents have enough savings to be able to cover a $1,000 setback. One of the first things you should do as a couple is save up to have this emergency fund in case anything happens.
Create a budget
In order to help you save up money and get through the daily expenses, you and your future spouse should set up a budget. You need to figure how together how you’re going to be managing costs. If you both work, you can figure out a plan to divide up the bills according to each other’s income. This means that the one who makes the most money will cover more expenses. You can also combine your income in a joint bank account and pay for everything from that. Whatever you choose, it’s important to have a plan.
Before you tie the knot, it’s essential that you discuss your finances and come up with a plan. It’s important to remember though that every couple is different, and you need to find the plan that works best for you.
