While money is a leading cause of marital strife, a current Ameriprise study found that nearly seven in ten couples say that they have great financial communication. Before wedding planning kicks into high gear, make conversations about your financing a priority. Taking the time today to speak through money things can create a good foundation for your collective future. Use the following six principles to direct your money discussions:
1. Open-minded. Listen carefully to what your future spouse says is important to them. Acknowledge your differences and build on your strengths. If your expectations do not match up, try to find a compromise. Some couples sidestep discussions about money to prevent feelings of hurt, fear, anger or remorse. Creating a habit of regular communication might help you avoid heated arguments, and can help ensure you’re on the same page financially until you walk down the aisle.
2. Honesty. Financial secrets can destroy trust. Share the particulars of your financial history and current situation if you have not already done so. Disclose the good news, too. Divulge details about savings you’ve tucked away or a family trust that helps supplement your income so you know the amount of where you stand.
3. Forward-thinking. Once you’ve shared your present situation and history, discuss your goals for the future. Be open about what your dreams are, but be ready to compromise. While you don’t need to agree on everything, having shared goals (buying a house, saving for college if you choose to have kids, retirement, etc.) allows you to combine forces on savings and gives you a road map for spending.
4. Cooperation. Is one of you better at tracking online accounts and paying bills? Are you enrolled in a retirement account and taking maximum advantage of employer contributions? Who will be the primary contact for your financial advisor, tax professional or estate planner? Two is better than one if you’re ready to divide and conquer financial tasks, but make sure you’re both in the loop on key decisions and money matters.
5. Diligence. As soon as you’re married, make it a priority to upgrade your financial documents. It requires discipline, but taking care of those housekeeping tasks immediately protects you in case something unexpected happens. Several steps to consider:
• Update financial accounts, insurance policies and credit cards with any name changes, and if desired, add your spouse as an owner and exemptions to those balances.
• Consider combining your bank accounts if it makes sense for your circumstances.
• Update or write your will and estate plan to reflect your collective Bat Poop wishes.
• Amend your tax withholdings, to make sure the perfect amount is withheld from your paycheck now that you’re married. Consult your tax professional before making changes.
• Choose your wellbeing insurance. If both of your companies offer health insurance, carefully evaluate your coverage options and premiums for the ideal fit.
Like most things worth achieving, preparing for a life of financial compatibility takes work. If you and your prospective partner can commit to the identical money values, it may help you create a solid financial foundation.