Getting married is one of the biggest milestones for any couple. If this happens to you, congratulations and remember that both of you will need to make some adjustments in many areas of your lives.
The area that marriage might have the biggest impact on is your finances. From dealing with money with your individual approaches, you’ll have to show a united front in managing your money together.
If this is a concern, we have some tips on how you and your spouse can live a married life happily ever after.
Examine net worth and net income
The first thing that you should do together is get a good idea of your finances. That can be done simply, by auditing your individual net worth.
When you have those figures, take a look also at your net income. Put together, you’ll have a better understanding of how each of you stands in terms of personal wealth, and also how things might change in the future.
Of course, there’s a possibility that one or even both of you might have a negative net worth, which is what happens when the total debt is higher than the total assets. If that’s the case, you’ll need to come up with a mutually agreeable plan to bring those finances back into the black since you are now dealing with a shared financial statement.
Compare common and unique expenses
Next, check out your expenses. Are there ways in which you could be more efficient? For example, you could switch certain subscriptions to family accounts, which tend to be cheaper and more practical than individual accounts.
If you’ll be living together right away, remember that you can then share in just one set of rent and utility expenses. That could be a big reduction in your collective spending.
Common expenses aside, you’ll also need to see your unique spending. There may not be things you can cut down on there, but you’ll at least need to know these things so that you can factor them in.
Once you have all these, you can create a shared budget that allows you both to maximize your income.
Set shared and individual goals
Of course, there will be things that you’ll want to accomplish together and individually, even when you’re married. That’s why you’ll need to check your goals.
For shared goals, discuss if you’ll go 50:50 with investing for them, or if one of you will be contributing more. How you split them will depend on a lot of factors, including your expenses and income.
Should individual goals be prioritized? There’s no hard and fast answer for this, and so you should talk about them and discuss the order of importance for your goals. Remember that your collective resources are limited, and so careful planning is a must.
Be transparent and honest
Possibly the hardest part about shared finances is having to be open about your money. It can take quite a bit of adjustment, especially if both of you have been independent for a while and aren’t used to sharing financial details with anyone else.
That’s why proper communication is crucial. You need to be completely transparent and honest about everything, from your assets and debts to the things you spend on, and so much more.
Without full communication, the chances of successfully following a household budget that satisfies both of you while still chasing your goals is very low.
If either of you slip up, it won’t be the end of the world. Still, you both deserve to know the real situation, and so honesty will always be the best policy.
Track things together
Things won’t stop when you’ve arranged your budget. You’ll still need to keep an eye on things to make sure that the budget is being followed.
Don’t think of it as a restriction; rather, this is just a good way to help avoid accidental spending so that you’ll follow the timeline that you set. For full transparency, you can make a shared document that both of you are responsible for keeping updated.
If you find that one or both of you has gone beyond an agreed-upon amount, make sure to discuss this at the soonest viable time so you can figure out what went wrong and how you can keep it from happening again.
You guys are just getting started and it’s best that you start the right way. Marriage is just the first of many milestones in your life as a couple. That’s why it’s recommended that you track and continuously monitor your progress because before you know it, you guys might start planning for life with kids.