Many “milestone” moments in life were put on hold thanks to the coronavirus. With large gatherings banned for a long-time, many proposals were postponed, but as things are starting to come back to normal, weddings are starting to fill the calendar again. If you were recently engaged or are thinking of tying the knot in the near future, here are some personal finance tips for engaged couples.
According to the National Foundation for Credit Counseling, nearly 70 percent of adults said they had negative feelings about discussing money with a fiancé. That is a mistake. While it may seem a little awkward, chatting about your finances doesn’t have to be a negative experience. Hey is some key financial planning advice for engaged couples from the Foundation.
Are You Planning a Financially Responsible Wedding?
Costs can add up quickly when you’re planning a wedding, especially if you’re inviting all of your friends and family. If you’re using a credit card to help pay for the event and you want to avoid building up additional debt, it’s worth looking into which cards offer wedding-specific rewards.
For instance, there are several credit card companies that offer bonus points on common wedding costs, like:
- Hotel booking
- Car rentals
If you’re having a destination wedding, many major hotel brands allow you to earn points by having your wedding at one of their hotels. You should always consider using your built-up reward points to pay for some of your honeymoon costs. Before you sign up for a new credit card, look at all the variables and perks.
Discuss Current Debts and Make a Plan
Disclosing your debt and making a plan to pay it down is extremely important. If you or your partner has debt, it’s imperative that you have a frank, honest discussion about the amount of debt you have and what kind of debt it is. When it’s time to have the money conversations about debt, take an easygoing approach. Rather than leading with pointed questions like, “How much debt do you have?”, start by asking your partner about how they view money and how they feel about spending versus saving. The national student loan debt crisis burdens many young couples so, make a plan to pay back your debt at a comfortable rate.
Decide on Having Joint vs. Separate Bank Accounts
Once you’re married, should you create a joint bank account or keep separate bank accounts? This is a common financial decision engaged couples need to make. On one hand, having joint bank accounts can help with mutual money management, but on the other hand, separate bank accounts offer a certain sense of independence.
Traditionally, couples will merge their bank accounts. If one partner makes substantially more money than the other, it can make sense to have joint accounts for ease of bill pay. Additionally, if one partner is particularly good at managing the bills and the other partner doesn’t enjoy those tasks, then joint accounts are recommended. At the end of the day, joint accounts promote trust and transparency, which is the basis of every good marriage. Even if for whatever reason you or your spouse keeps a separate account you will find that having at least one joint account makes sense for paying household bills, etc. In fact, according to a 2016 TD Bank survey, 76 percent of couples stated that they shared at least one bank account.
Discuss Your Financial Future: Lifestyle, Children and Retirement
Start by calculating how much each of you can save each month — it’s important to have an emergency fund, but also create an opportunity fund that you can use for large purchases, such as the down payment on a house. When it comes to these areas, you can dive into deeper discussions, such as having kids, investing and retirement. From there, talk about what you each value and work together to develop concrete steps on how to achieve those goals.
Smart financial planning upfront can be the key to a long, happy and prosperous marriage.