Life Highlights
By Joel Zimmerman

12 Steps to Effective Financial Planning When You’re Newly Married

Marriages are forever; that is the premise with which you begin the journey with your life partner, but money management issues can quickly erode your relationship. For instance, if your spouse is a spendthrift while you like to save for a rainy day, chances are that you may hit the roof when your partner makes a big spend, either early in your marriage or later on.

Mutual understanding and the right balance between independent and joint decisions are crucial factor in shaping successful marriages. To ensure fewer opportunities for marital discord, you need to be in tune with your spouse when it comes to financial planning.

The following financial planning tips will help you successfully plan your future together and enjoy financial security all the way:

  • Talk, Talk, Talk

    Ideally, premarital financial planning should be a must, to clarify your respective positions on money with absolute honesty. This sets the tone of your marriage financial planning, but if you missed the boat, it’s never too late. Have the talk now to explain and understand each other financially, especially in terms of debts, insecurities and earnings, and set the ball rolling!

  • Pick a Money Management Method

    You can choose to split expenses and manage independently, or choose to go hybrid with a joint account to manage bills and payments jointly. Over time, as trust builds, you can club your accounts totally and spend and save together with complete transparency.

  • Set Goals

    Define short and long term goals, for the two of you as a couple as well as individuals, and then calculate how much money you need to save and how, so you can achieve them.

  • Set a Budget

    A budget is basically planning your cash, a simple accounts statement of how much comes in and how much goes out. The same must be planned in line with your needs and wants, wherein you prioritize the former over latter.

  • Track Your Budget

    Just establishing a budget is not enough. It’s important to review it from time to time to ascertain whether you are saving enough and meeting your life goals in a timely manner. The simplest way to do this is by designing a newlywed financial planning worksheet wherein you track your expenses/income regularly.

  • Set up an Emergency Fund

    Liquid assets that will cover three to six months of expense must be maintained separately from your basic savings plan, only to be touched in a true emergency. This is one of the key foundations of financial planning.

  • Protect Yourself

    Another pillar of financial planning for married couples is having a suitable life insurance plan in place to cover an eventuality like death. Also consider variables of life insurance to cover untoward emergencies like disability.

  • Retirement Planning

    Saving for your retirement is a crucial financial goal, which you must go about with discipline. Ideally, you should begin financial planning in your 20s but if you didn’t, then catch up with instruments such as annuities rather than traditional plans.

  • Get Out and Stay out of Debt

    The best financial advice for married couples is to work toward a completely debt-free life. If you carry any debt, get rid of it on priority and steer clear of credit dependency.

  • Find Your Risk Level

    Risk levels should be on median ground, especially if one of you is highly risk-averse (which can stunt growth), and the other a risk taker (which can erode your assets).

  • Draft Estate Documents

    Life comes with no guarantees. Ensure all final documentation is complete, such as healthcare directives, estate planning instruments like wills or trusts, and power of attorney rights in case of premature death for one or both of you.

  • Automate Payments and Savings

    Ensure automation of contributions to your retirement and other savings accounts, utility payments and other regular expenses, to save time and prevent overspending.

This 12-step guide will help you weather any storms in your life (at least financially) and keep your wedding vows rock solid as ever. Contact LifeCentra’s financial advisors to understand how to make the most of your investments, both today and in the days to come.

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