An important step in any financial plan is ensuring both parties understand all details regarding their accounts - this includes joint and individual checking, savings, and investment accounts.
If one partner favors taking risks while the other prefers saving, your role should be to help them find a compromise that meets both of their financial philosophies.
Buying a Home
Home ownership can be an exciting milestone for any couple. But before taking this important financial step together, it is crucial that each partner understand their individual goals and how they fit with those of the other partner. For example, if one person owes more debt than the other does, you may need to compromise on certain expenses or savings goals; simultaneously it is also essential to discuss your priorities together as a team.
Discuss all sources of income you plan on relying on for homeownership, such as salary, commissions, dividends and bonuses - such as salary, commissions, dividends bonuses or windfalls - so both partners understand each other's expectations before embarking on homeownership together. A clear understanding can help couples avoid conflict or disagreement down the road - such as opening joint accounts if necessary and how best to manage them. You might even set up regular money dates so as to stay on track towards reaching long-term goals together!
Having Children
Financial obligations of marriage bring with them many responsibilities and considerations for couples. Together they should discuss how they will handle expenses such as everyday costs, debt repayment, and saving for retirement. A fiduciary financial advisor can facilitate these discussions and provide guidance that supports your personal and family goals.
If home buying is part of your family's plans, discuss mortgage options as well as whether it makes more sense to buy in your current city of work or another, cheaper location. Also take into account how a move might impact real estate taxes and exemptions.
If you are planning on having children, start a college savings account or investigate 529 plans with tax advantages and other advantages. Also discuss any additional income sources needed for raising kids which aren't cheap and how you will manage joint and separate accounts, whether by using an auto-splitting debit card or merging.
Investing
Many couples find that investing together provides an effective way to save more and achieve long-term goals such as retiring comfortably or purchasing real estate investments.
As part of a couple, it's essential that both individuals understand each other's risk tolerance and investment goals for making informed financial decisions.
Some couples opt to combine their finances while others prefer keeping them separate. This approach may work well when both partners earn equal wages or one spouse stays home to raise children or attends school without earning income, however it may be harder to agree on spending and debt-payoff plans. An emergency fund and regularly reviewed budget should always be in place regardless of which option you select; additionally, reviewing beneficiary designations on life insurance policies, IRAs or any other retirement accounts would also be wise.
Retirement
Couples managing their finances using individual or joint accounts should regularly discuss spending and savings habits as well as understand each other's goals and priorities. Communication plays an essential role.
Couples should review who they have listed as beneficiaries on all financial accounts (banking and investment) and retirement plan accounts, including post-marriage changes to ensure that both partners will be protected should one die unexpectedly. By updating beneficiary designations post-marriage, couples can ensure that any new spouse will be provided for in case one of them passes away unexpectedly.
Establishing an emergency fund should be one of the primary goals for any married couple; having such a fund in place can help avoid conflicts about money issues between partners.
