One of our staff members has many years of experience counseling couples on financial planning (from newlyweds to couples celebrating milestone anniversaries), so we decided to interview her to see what additional financial advice she would give couples:
What steps do you recommend couples take to be financially prepared for their future?
Step 1: Come to an agreement on how to share your money. Decide if you want your money all in one account or separate ones. For example, many people with second marriages decide to have a shared account for communal needs and then separate accounts for all other spending. I have seen both versions work well, as long as both people have the same expectations.
Step 2: Agree on some amount that each person can spend without needing to discuss it with the other. The amount will depend on the couple. It could be $100 for some or $5,000 for others. Everyone has to have his/her own money to spend. Think about what’s important to each of you and prioritize. Anything over the set amount should be discussed.
Step 3: Consider ownership of assets. Many couples overlook ownership of assets, such as who is listed as the owner on the title of houses, cars and savings accounts. Make sure you’re informed and that the titles of your assets reflect your wishes, especially with beneficiaries of life insurance. In addition, if you have minor children, even if you have a will, you should consult with your attorney. A will is a good indicator you might need a trust to direct how your financial resources are to be used in raising your children in the event of your premature death. People make the mistake of thinking trusts are for wealthy people, but it just specifies how your assets are used.
What is the biggest mistake you’ve seen couples make?
Getting deeply into debt early. When you get into debt today you are spending tomorrow’s income, and then two to three years from now what was manageable is now burdensome. Disagreements over money is one of the biggest stresses in a marriage, but if people can come together with a spending plan early, the happier their life will be. It’s not about how much money you have; it’s how you agree to use it so each person feels like their goals and values are a priority.
To be able to live free from financial stress makes life easier, and again, freedom from financial stress is not about how much you have- it’s being able to sleep at night not worrying about how you’re going to pay the bills.