Recently Engaged? Budgeting Tips For Couples to Get Started
Weddings may be costly. After the wedding, most couples aim to purchase a property. Then there's the question of when to have a family. It's all an investment. Whether you've been cohabiting for a long and have already integrated your accounts or you've never discussed money at all, the engagement phase is the ideal moment to sit down with your partner and create a budget.
Here are some things to consider when becoming financially prepared to start your life together.
Joint Accounts or Multiple Accounts
When you integrate your finances, you have a few alternatives for managing your money. Some couples would prefer joint checks and savings accounts, which include all incomes and all bills. Other couples have household bills paid jointly and personal savings and personal expenditure accounts separately. A further choice is for each member to pay their bill shares out of their own accounts with fully independent finances. No matter how you handle your money, it is vital that the next actions continue to be taken to maintain financial peace in your new family.
To get your budget and marriage off to a good start, both spouses must declare their income and previous obligations. While you are not always liable for debts incurred by your partner before marriage, any debt will have an impact on your household's ability to save. Furthermore, when money is revealed, one partner's income may be significantly higher or lower than the other's. This can have an impact not just on saving but also on how money is handled, as mentioned above. Due to disproportionate debts or uneven incomes, some couples choose to keep accounts separate. They then deposit the appropriate percentages into joint accounts for the sole purpose of paying joint bills. Discussing debts and incomes prior to marriage saves a lot of stress down the road.
You should talk about your financial goals, both short-term and long-term, once you've talked about your obligations and incomes. Saving for a wedding, planning a honeymoon, and paying off debts before to marriage are all frequent goals for couples during their engagement. Long-term goals include saving for a down payment on a home, getting a new automobile started, and planning for retirement. Don't forget to talk about any intermediate objectives you could have. For example, you've always wanted to take your family to Disney World. Expensive vacations should be planned and budgeted for.
After you've laid out your income, bills, and ambitions, it's important to figure out how much money can be saved each month to help you achieve your objectives. Make a list of fixed costs, such as monthly debt payments. Subtract the total household income from the fixed expenses to arrive at the money that can be saved or spent. It's crucial to remember to set aside money for unexpected expenses like gifts, auto repairs, haircuts, clothing, and insurance. This is another topic that should be discussed prior to marriage. Clothing and other discretionary spending expectations may differ between couples. Not to mention that in order to meet goals, some luxuries may not be considered affordable anymore. Having the discussion early on leaves no room for surprises after the vows have been said.
Your budget, like your relationships, needs attention to stay healthy. To make sure you're both on the same page, keep track of your expenditures and go over your budget with your partner on a monthly basis.
Plan a budget discussion with your fiance to ensure that you're ready to say "I do." A meaningful chat about your finances can be the start of a happy life together. If you and your fiance are ready to make homeownership a priority, contact a reputable loan officer for advice on where to begin.