Are you newly married or soon to be tying the knot?
According to Texas Financial Advisory, research suggests that 70% of married millennial couples argue about financial decisions more than any other topic.
This could explain why some experts say financial problems are one of the top reasons marriages fail.
Fortunately, when couples work together to address their finances, they may be able to mitigate many of the problems money may cause in a marriage.
To help couples stay on track financially, Brooklynn Chandler Willy, president and CEO of Texas Financial Advisory, provided ten tips to consider going over.
10 tips for newly married couples
1) Communication: Couples should consider talking about their financial goals, memories and habits, as each partner may come into the marriage with fundamental differences in experiences and outlooks driving their behaviors.
Communication and honesty are key. When two people get married they agree to share a financial future and it is important to keep an open dialogue as you save, invest and plan together.
With honest communication and a shared plan, you and your spouse can tackle money as a team and plan for the future you both want.
2. Set goals: Setting goals establishes a common objective that both partners become committed to pursuing.
Some couples opt to combine everything and split everything evenly - income, monthly bills and checking savings accounts. Other couples prefer to keep everything separate.
3. Create a budget: A budget is an exercise for developing a spending and savings plan that is designed to reflect mutually agreed-upon priorities.
It’s important to discuss and establish your preferences early along with a budget that includes a plan for savings, investing and retirement. This will help keep you on track for achieving financial goals like buying a home, paying for a child’s education or even taking an exotic vacation.
4. Set the foundation for your financial house: Identify assets and debts. Look to begin reducing debts, while building your emergency fund.
When planning for retirement, it’s important that couples think about their future differently from the way single people do. By making retirement decisions with a joint outcome in mind, money can last longer and both spouses can look forward to a more secure retirement.
5. Work together: By sharing the financial decision-making, both spouses are vested in all choices, reducing the friction that can come from a single decision-maker.
It’s never too early to start planning for your retirement which can mean contributing to 401K plans, setting up IRAs or Roth IRAs, purchasing annuities and working with a financial professional to develop a comprehensive plan for retiring.
6. Set a minimum threshold for big expenses: While possessing a level of individual spending latitude is reasonable, large expenditures should only be made with both spouses’ consent. Agreeing to a purchase amount should require a mutual decision.
7. Set up regular meetings: Set aside a predetermined time once or twice a month to discuss finances. Talk about budgeting, upcoming expenses, and any changes in circumstances.
Marriage affects your finances in many ways, including your ability to build wealth, plan for retirement, plan your estate and capitalize on tax and insurance-related benefits.
8. Update and revise: As a newly married couple, you may need to update the beneficiaries on your accounts, reevaluate your insurance coverage, and revise (or create) your will.
Wills - Consider writing your wills and living wills and designating your health care power of attorney right away. Designate your health care power of attorney. This is the person you select who will oversee and medical decisions outline in your living will if you are unable to make those decisions yourself.
Insurance - Review any insurance plans and benefits to determine not only if you have enough insurance to meet your needs, but also that you have all the right insurance such as life, disability and long-term care.
Taxes - Depending on your individual income levels, filing federal incomes taxes as a married couple may result in higher or lower tax liability as compared with when you each filed singly. Tax planning can help you efficiently manage your tax burden as a couple.
9. Love, trust, and honesty: Approach contentious subjects with care and understanding, be honest about money decisions you know your spouse might be upset with, and trust your spouse to be responsible with handling finances.
Throughout your married life you’re going to experience life events - some planned, some not that will affect your finances. It’s important to always evaluate if you’re on track to reach financial goals. These goals could be related to building wealth, retirement planning, leaving assets to heirs or whatever they might be.
10. Consider speaking with a financial professional: A financial professional may offer insights to help you work through the critical financial decisions that all married couples face.
Texas Financial Advisory specializes in a holistic approach to wealth management that helps couples achieve their financial goals. Advisors work closely with clients to develop strong personal relationships that help them develop customized financial plans and enable them to make informed decisions with you.
Advisors work closely with you to define your financial goals and outline an optimal path for their achievement.
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Investment advisory services offered through Queen B Advisors, LLC, a Registered Investment Advisor, which does business as (d/b/a) Texas Financial Advisory. Insurance products, tax preparation services, and estate planning services are offered through Texas Insurance Advisory, Texas Tax Advisory, and Texas Estate Advisory, respectively, all of which also do business as Texas Financial Advisory. Insurance products, tax preparation, and estate planning are offered separate from investment advisory services. Neither Queen B Advisors nor Texas Financial Advisory offer tax or legal advice. Please consult the appropriate professional regarding your individual circumstances.