When you first get married, financial planning will be the last thing on your mind. You will still be high on the pure joy of the wedding, the honeymoon, and looking forward to a future together.
However, money is at the root of many disputes between married couples. So, the sooner you start planning the financial aspects of your partnership, the better. Here are ten tips to help newlyweds manage their money and plan their financial future together.
1. Be Open About Money from Day One
The first rule of any financial partnership is honesty. So one of the first things newlyweds need to do is discuss their current financial position. Ask each other how you are doing. Questions like do you have any debt? If yes, do you need help with it?
Bottom line, have an open and frank discussion about finances and lay all the cards on the table. Discuss how much you earn, how much you have in savings accounts, and how much debt you have. It would be best if you also talked about your financial goals and your current expenditure levels. Like would you like to live in the West Vancouver area or perhaps just get a nice apartment in Downtown? Each has a different cost right?
It is not uncommon for a couple to have different views on financial matters. It would be best to get any differences of opinion out in the open now and then work towards shared financial goals.
2. Set Your Goals
You just got married, so you must have common life goals. Even so, what at first may seem like common goals can differ when you start to talk about them in earnest. You might both want children, for example. But one of you might be thinking about having the first child within two years.
The other might be thinking more along the lines of ten years. Decisions of this nature have a significant impact on your financial planning. It is best to agree on your financial and life goals from the outset and start planning for them now. Of course, you can change your mind later, but having an outline plan in place will make your financial planning less challenging.
Although Vancouver offers tons of friendly programs for new couples and their first child, it’s best to plan these things out.
3. Consolidate Expenses
You are now married, so now you can start running your finances as a family. You won’t, for example, need two Netflix subscriptions anymore. So, review your current financial commitments and consolidate things like subscriptions.
If you have financial products like insurance policies with different providers, consider moving
all your policies to one insurance company. Consolidating expenses will save you money on duplicate subscriptions. You could also get discounts on things like insurance by transferring all your policies to one provider.
4. Set a Budget
Budgeting is another discussion it is best for newlyweds to have early in the marriage. While setting a budget may seem cold and unromantic, it is the best way to keep your joint finances under control. Write down what your expected expenditure will be by category of cost, and agree on how much you will save each month towards your financial goals. Can you find a payday loan somewhere in Vancouver and take care of it? Should we both get a payday loan or or perhaps a loan from the bank to settle things?
There are lots of apps available that will help you set and manage a monthly household budget. Remember, though; there will be unexpected expenses. Be prepared to work together to adjust your spending as needed to ensure that you still achieve your long-term financial goals.
5. Set Spending Limits
Spending limits can be a bit of a contentious issue, especially if you and your partner have different spending habits. However, having predefined limits on spending can keep your finances under control and avoid unpleasant arguments. What you define as a significant purchase will be up to you to decide. Still, the crucial thing to agree on is that neither of you makes large purchases without consulting the other.
6. Set Up an Emergency Reserve
Vancouver is an expensive city and unexpected costs can wreck your long-term plans. So, it is advisable to set up a reserve savings account and move a set amount into that account each month.
Your reserve account should not be used for anything else other than financial emergencies. If you want to save for luxuries or occasional treats, save that money in a separate account. In other words, no dipping into the emergency fund whenever you feel like a night out or a weekend away!
7. Decide Who Will Be Taking Care of Money Matters
Decisions about how you spend your money must, of course, be made jointly. However, it is generally helpful to have one partner responsible for managing the money and paying the bills.
For example, if things start to go sour financially and you need additional emergency funds, who will take care of it. Or would it be both? Having a sole money manager will avoid bills being paid twice or getting loans twice as well. It will also make managing the household budget less of a challenge. It is also a good idea to hold a monthly finance meeting to review your joint finances.
8. Plan for the Worst
The death or disability of one of you is not a topic for discussion on the honeymoon. Even so, it would be advisable to plan for such an eventuality early. If the worst were to happen, you would need plans in place to ensure the remaining partner’s financial stability. So, consider taking out life and disability insurance for each of you. It would also be advisable to draft a will as soon as possible to ensure that your wishes regarding your finances are abided by should one of you die.
9. Start Long-Term Planning Straight Away
Saving for a college education for children that are not yet even born may seem like an odd thing to do. However, the sooner you start saving for long-term commitments like this, the easier it will be to build up sufficient funds to pay for these items.
The same is true for your retirement. Start saving now, and you will have a nice nest egg when it’s time to put your feet up and enjoy having the grandkids round to stay!
10. Find a Financial Planner to Help You
During your marriage, you will be faced with no end of significant financial decisions. Life insurance, investments, loans, and mortgages are just a few of the financial products you might need to consider. And then, there are the tax implications of your financial decisions to cope with too.
If it all becomes too much for you, don’t be afraid to ask for professional advice. Indeed, it can be beneficial to consult with a financial advisor early on in your marriage to help you plan your finances. That way, you can avoid making financial mistakes and have a trusted advisor who can help you throughout your married life.
Conclusion
Marriage, whether in Vancouver, Canada or anywhere for that matter, should be based on mutual trust. So, setting budgets and spending limits and holding finance meetings may seem unnecessarily formal. However, putting ground rules in place can help avoid misunderstandings and subsequent arguments.
