What Happens with Your Finances After “I do”?
For many newlyweds, this is the first time they may have an additional name on their checkbook, savings account and other financial documents. That’s a big change. A good, honest discussion early on is crucial. Do you have the same general spending habits? Do you have the same overall goals? Do you believe in paying for items over time or on time? Credit or cash? Is one of you more adept at balancing a checkbook, keeping records of the family finances, and preparing a budget? How do you each adjust to the other’s financial wishes?
For some couples, a joint checking account may not be the top item on the priority list. Some might wish to keep separate accounts. But whether you keep joint accounts or separate ones, don’t keep any financial secrets from your spouse.
Communication is key to a happy partnership, and especially so in the area of finances. “Financial problems” is often cited as a major cause of marital difficulties – so knowing and planning together is a great way to avoid difficulties later.
Have open discussions about your goals, dreams and that all important big picture. Will you save for a house from the get-go, or is that something to postpone? Should you tackle student loans first? Is regular travel something that should be built into the budget? What about going out to dinner? Once a week? Once a month? What about vacations? Timeshare? Purchase a second home? It’s good to dream – and even better to plan for those dreams.
Create a budget, listing all income sources and include weekly, monthly, quarterly and annual expenses; rent, utilities, auto, insurance payments, groceries, gas, meals out, etc. And – this is important – set aside money weekly or monthly for emergencies. Young couples may feel invincible, but things beyond our control happen and knowing that you’re prepared for the unexpected will make for sweeter dreams.
Beverly Beaulieu, Florence Bank’s Senior Vice President/Retail Banking Director, recommends a great short read, not only for newlyweds but for financial management in general: “The Automatic Millionaire” by David Bach. “Check it out and start saving!”
There are lots of additional items you’ll consider: wills, IRAs, pension plans – but it all starts with early planning.
As always, please call us at 413.586.1300 if you have any questions.