Are you, or is one of your children, tying the knot? For any couple heading to the altar, financial matters can emerge as a major challenge. As much as you may love each other, there's no guarantee you'll be on the same page about money. In fact, it's not unusual for a "spender" and "saver" to join together in holy matrimony, only to find out they're at odds over finances once the honeymoon is over.
1. Conduct an inventory. It may help to start by figuring out who has what and how much. List the assets you have coming into the marriage and get your partner to do the same. But don't forget the other side of the ledger. Be sure to take stock of each one's outstanding debts and other liabilities.
2. Get organized. Once you've finished the inventory, put your financial affairs in order. One big decision is whether you want to keep your individual assets separate or combine them in joint accounts. This is a personal preference, but younger couples tend to pool their resources while older couples, especially those embarking on a second or third marriage, are more likely to maintain separation, at least initially. You also will need to consider the beneficiary designations on retirement accounts and other holdings. For example, will you leave things to each other?
3. Set your priorities. Developing a long-range financial plan actually can help your marriage succeed. Do you want to have kids? Will you pay for their college? What about owning a home? It's not too early for newlyweds in their 20s or 30s to establish savings goals. Also, don't ignore the need to set aside funds for retirement, even if it's decades away. If you have other objectives—owning a vacation home, for instance—factor those into the mix.
4. Don't forget insurance. While your main focus is likely to be on meeting your goals, you can't assume everything will go smoothly, and an illness or job loss could be a major setback and put pressure on your marriage. One way to hedge against future problems is to obtain health insurance, life insurance, disability income insurance, and long-term care insurance.
5. Hope for the best but plan for the worst. Almost half of marriages end in divorce. It may be difficult to broach the topic, but you may want to consider using a prenuptial agreement, especially if you're the one bringing most of the assets into the marriage or if you're getting married late in life. "Prenups" no longer carry the stigma they once did, and having a clear-cut agreement about what happens if you split up actually could help keep you together.
Finally, remember that we're here to provide whatever financial assistance you may need.
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