Steps to take when you are recently engaged
If you are recently engaged it means it’s time to start planning — not only for your wedding and honeymoon, but also for your financial future together. Whether this is your first time walking down the aisle or a subsequent marriage, finances can be a major source of contention between newlyweds. To avoid such conflict over money matters, it’s a good idea to sit down with your partner to discuss important financial issues before tying the knot. Although it may seem somewhat unpleasant, having the tough conversations out of the way will allow you to begin your marriage with a solid foundation while also protecting your financial wellbeing.
Some key items to discuss are spending habits, long-term goals, and financial histories. Before you say “I do,” share your spending styles and expectations with each other. Perhaps one of you is a big spender while the other is more of a penny pincher. This could quickly lead to an argument if left unchecked. However, it could also be prevented if the subject is brought up early and an agreement is reached that satisfies both parties. You may also want to talk about bank accounts at this time — will you maintain separate accounts or combine all your finances once you are married? In either case, it’s best to set a budget and express all financial expectations now to avoid disappointment and upset down the road. Finding common ground will give you peace of mind and prevent future arguments over money management.
Establishing long-term financial goals is another topic fiscally responsible fiancés would be wise to consider before they wed. Communicating these goals will help create a unified vision for the future that you can work toward and accomplish together. Examples of these goals include purchasing a home, traveling, or planning for retirement. To determine if those goals are feasible, you’ll need to have a budget in place and share the details of your current financial status with one another. Understanding your partner’s financial history is an essential part of planning your future together. Be sure to inform each other of all outstanding debt, derogatory credit items, unpaid taxes, judgments, liens, etc. Trust is a fundamental part of any marriage, so you’ll want to be up front and honest about your pre-marital financial position. Trading credit reports and prior year tax returns is a fair and easy way to accomplish this without bias.
Lastly, when you are recently engaged, you’ll want to prepare a post-wedding checklist to tackle once you’ve returned from your honeymoon. For example, you’ll need to decide if you will be filing income tax returns jointly or separately and update your income tax withholdings through your employer. If your name has changed, you’ll need to apply for a new social security card, update your driver’s license and other important accounts. Also, consider changing the beneficiary on any insurance policies and retirement accounts you own as well as updating your last will and testament. After all that, just sit back and enjoy the married life!
