Financial Management for Couples to Have Before Marriage
Till death do us apart, well let's hope that doesn't turn into, till debt do us part. You're about to tie the knot and things are going to change. Some couples may already have had the money talk, while others are deciding to hold it off until it's a necessity. If you fall into the latter category, money talk before marriage is as good a time as any.
Here's a checklist of suggested financial tips to have before you become Mr and Mrs.
- Design a budget and track it
- Discuss immediate priorities after the wedding
- Decide the type of wedding you want to have and the budget
- Be upfront about credit card debt
- Talk about common financial goals and start saving together
- Understand each other's spending habits
- Consider a joint account to prepare for the wedding
You may have a personal budget that you monitor and track every month, but once you're married, this is a task that should be undertaken as a couple and a single household. How much will be spent on groceries, utilities and bills, entertainment and dining out, etc?
This could include large purchases like a new home, or perhaps your immediate priority is a much-deserved honeymoon. It could even be as simple as clearing off credit card debt that you may respectively own. Whatever the priority, ensure you're on the same page so expectations are managed and you can work on a plan.
Are you thinking of a grand wedding at a 5-star hotel with multiple receptions? Or a small, cosy intimate gather with family and friends? From the get-go, it's critical to agree on the type of wedding and how much you are willing to spend for it. Would you agree to take out a personal loan for your wedding? Or do you find more value in allocating money to live after the wedding?
Don't let your future spouse's debt become your nightmare. Be completely upfront and honest about your financial health with each other. If one is drowning in credit card debt, work on a plan to have this cleared as soon as possible because you won't be able to save up for long-term goals as a couple if one is struggling to pay off debt. You can read more about managing credit card debt as a couplehere.
Talk about your short to long-term goals and start working on a financial plan together. Perhaps you'll like to buy a new property instead of renting the one you have now, or eventually, you'll like to upgrade to a bigger car once you have kids, or perhaps you want to finally tick off that backpacking trip around Europe together. The key here is to be on the same page when it comes to finances.
We all view money differently and have different spending and saving habits. It's important to take the time to ask your partner about their habits. Are they big spenders or big savers? Do so to avoid heated arguments down the line because of your difference in views. After all, money is the leading cause of divorce in Malaysia. Don't let it tear you apart!
To get a taste of managing finances together, you could open a joint account and have a 'trial run' at sharing the responsibility of financial management by handling the single account together. Any money that goes into this account, or that is taken out from this account, should be used towards the common goal of your wedding. As a couple, you would need to discuss and decide what those purchases would be and if you are in disagreement, the money shouldn’t be used. It must be a joint decision and this will be a great test of your ability to handle it as a couple.
For more tips on managing finances as a couple, head over the CompareHero.my blog!