Getting married is exciting, but it’s also a lot of work. In addition to planning the wedding, you and your partner will also want to figure out how you’ll be handling things as a married couple, from how you’ll combine your possessions to how both of you will handle the household chores.
Most importantly, though, you and your partner will need to figure out how to handle your combined finances. Starting your marriage on a solid financial footing will help you and your partner plan for the future more effectively, lower the odds that you’ll fight over money and avoid some of the common pitfalls that couples fall into. Here are five steps you can take that will put you on the right financial path.
Discuss Your Finances With Each Other
Your first step in managing your money as a married couple should be to look at each other’s financial situations. You might want to start with something simple, like telling each other your credit scores, and from there you can talk about your finances in more detail, like loans you’re paying off, how much you have in your savings account and even what investments you think will pay off.
This might make you feel uncomfortable, especially since not talking about finances is pretty much ingrained in American society, but if you can overcome your discomfort you’ll have taken a vital step to a successful marriage. Being open with your partner about your financial situation will give you a good idea where both you and your partner currently stand financially, and you’ll be able to figure out what financial goals you want to set as a couple.
Update Your Official Documents
Once you and your partner are legally married, you’ll need to get your official documents updated, especially if you’ve changed your last name. Here are some of the documents you’ll need to update:
- Driver’s license
- Social security card
- Financial institution information
- Your payroll information
- Your investment and retirement accounts
- All insurance policies
You’ll also want to update your information with your creditors, including your landlord, loan lenders, utility companies, mortgage lenders and credit card companies. You can make sure you’ve contacted all your creditors by going through the last two months of your bank statement and looking at the payments you’ve made during that time.
Get Rid of Duplicate Bills
While you have the last two months of your bank statements available, you should also look through them and see if you and your partner can get rid of any duplicate bills. If you’ve already lived together before getting married, you may be tempted to skip this step, but it’s still worthwhile to do. You may find a duplicate bill that you’ve overlooked, such as a Netflix subscription, or you might figure out that you can save money if you combine bills, like your smartphone service payment or your car insurance.
Create a Budget
Once you and your partner know each other’s financial situations and you’ve gotten rid of any duplicate bills, you’re ready to create your budget. The process might seem more complicated with two people, but it’s really not. The only difference is that when you and your partner create a budget, you’ll want to add up your respective incomes, then list all your expenses and add them up.
If the sum of your expenses is below the sum of your combined income, your budget is balanced and you’re good to go. If the sum of your expenses is more than the sum of your incomes, though, you’ll need to look through your expenses and figure out where to cut back in order to balance your budget.
It’s worth pointing out that you and your spouse will have to choose how much you’ll want to combine your finances in the budget. Some couples will split the essential bills evenly, then use the rest of their paychecks for their own personal expenses, such as clothing and entertainment, while other couples may prefer to combine their finances completely, including their personal expenses. Talk with your partner and select a method that works for both of you.
Set Financial Goals
Once you and your partner have completed the previous steps, you’ll have a good idea of where you stand financially. Now you and your partner can start thinking about the future.
Talk with your partner about your financial goals, and make sure your partner tells you about their goals too. Figure out what your most important goals are, both to you as a couple and to each of you personally.
Once you know which goals you’d like to achieve first, take some time to make those goals SMART—Specific, Measurable, Attainable, Realistic and Time-Bound. It's worth pointing out that First Alliance Credit Union has a SMART goals worksheet that can make this process much easier. Once you’ve set up your first SMART goals, you’re ready to start working towards them.
Build Your New Life Together With First Alliance Credit Union
Starting your marriage on solid financial ground is one of the best things you can do to make sure your marriage is successful. By taking the time to learn about each other’s financial situation, coming up with a budget for both of you and setting financial goals you both want to work toward, you’ll be paving the way for your financial success and getting to know your partner better in the process.
If you’d like help starting your marriage on the right foot, become a member of First Alliance Credit Union today. In addition to the SMART goals worksheet you can find in First Alliance Credit Union’s resource center, you can also open a traditional savings account or a money market account to save for your financial goals and use the electronic bill pay service in our online banking platform to help make sure your bills get paid on time.