As we go through different stages in life, we have different planning needs. This article looks at a few tips to consider before you get married (or even involved in a serious relationship).
Saving for the wedding
Weddings can be very expensive. That’s why it’s important to find out what the costs will be and how to fund the big day. To start with, have a look at your combined income, decide on what you both want to achieve (financially) before and after the wedding. Think about; Do we already have a mortgage? Would we like to buy a house soon after the wedding? Do we have car loans? Can we afford to spend $5,000, $10,000, $30,000 (pick a number) on the wedding and maintain our same lifestyle?
Things to consider once married
Did you know - 70% of people experience conflict around money. Here are a few things to consider, and to do, which may just keep the peace around your finances.
1. Create separate accounts or one joint account?
Having separate accounts with money that you can spend can be one way to lessen arguments about money while knowing that in your joint account there will be enough money for bills, mortgages/rent, and holidays. However, some couples can happily operate out of one account. What will work for you?
2. Track your spending
While not everyone likes the idea of keeping tabs on every dollar spent, there is a benefit in knowing where your money goes on a regular basis. As your income increases, are you able to convert that to savings and investments, or does it seem to slip through the fingers?
3. Set your financial goals together as a couple
Ask your partner what they hope to achieve and when they want to achieve it by. Do you want a three month holiday together, do you want to buy a house, do you want to buy investments, are either of you looking to start a business? Would you both like to quit, retire and travel the globe, or is that only one of your dreams?
4. Discuss Finances on a regular basis
Talking about money isn’t necessarily the easiest thing to do but it is easier when discussed regularly, and particularly before either party is stressed out about the finances. To different people money means different things - to some it’s about new opportunities while to others it’s security.
5. Understand and appreciate you may have different preferences for dealing with money.
A common source of conflict is not that partner’s have different goals around money, it’s that they have different ways they prefer to deal with money.
6. Understand that you may have to handle tough financial times in the future
No matter how much you plan and talk about your finances you have to be prepared for the unexpected. Times of unemployment, injury, illness, unexpected pregnancy, can happen – remember in these times to stick together and not blame either party for it. You can reduce financial stress from unexpected events by using insurance, such as Income Protection insurance, Life insurance and/or Home and Contents insurance.
Marriage can be a wonderful thing, but it can also bring it’s challenges. The statistics are significant in that financial stress is considered the most prevalent cause of separation and marital conflict. Do you have any tips you would like to share or add to the list?*
* This article has been sourced from IRESS Ltd., Financial Knowledge Centre.
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