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Money, Honey: Get Your Marital Finances in Check

By Amy Arsenault | bio | contact

Whether you’re eloping to Vegas or tying the knot with a fairytale wedding—no matter how you say “I Do,” one thing is always certain: the day after saying your vows, a certain reality sets in. Life together suddenly becomes more complicated than choosing a new sectional sofa or fighting over Project Runway vs. ESPN. Your relationship evolves into a life together where issues like budgeting, credit cards and even your bi-monthly spa trips are put under a giant microscope.

Monica Narvaez, [CFP®, Director of Financial Planning and Partner, at Strategic Wealth Advisors and Financial Advisor with Investors Capital Corporation] helps couples not only eliminate debt but also accumulate wealth.  She lent us her expertise in order to help newlywed readers get their checkbooks ‘in check.’ While finances can be a conversational landmine  for new couples, considering the following fundamentals can help avoid unpleasant conversations later and ensure financial stability now.

Discuss Your Priorities

Before committing to a plan, keep in mind the basics of your marriage. Things like age, income level and amount of debt can be important factors in determining the first steps you need to take. While a couple in their mid 20s may want to focus on paying off school loans, others may want to start saving for a down payment on their first home. Narvaez notes that it’s important at this stage to “be realistic” about your priorities and “know what you can and cannot spend your income on.”

Whether you plan to travel the world or prefer to populate it in your first few years of marriage, recognize what your priorities are and determine a way to accomplish them.  Focus on paying down debt and building for the future. Now that your credit scores and financial history are intertwined, it’s important to stay honest and on track because, as Narvaez says, “No one likes surprises.

Set Common Goals

An unavoidable dilemma arises after reading guideline number one. Your partner is thinking, “backpack through Europe” and you are already choosing the tile for your brand new condo. It is simply impossible to set a budget and stick with it if you are each saving money for different goals. Discussion and compromise need to take place in order to get you both on the same wavelength. Many couples forget that the root of money problems is a lack of communication; view this conversation as an opportunity to strive for something together.

Narvaez suggests that couples work together by “establishing a plan to get a good handle  on income and expenses. Then agree on a dollar amount to save every month in order to reach your goals.”

R-E-S-P-E-C-T

Once common goals and a budget are established, it’s important to stick with them. Imagine your husband splurging on sports while you opt out on your weekly mani/pedi in order to afford a nicer home. Avoid making him feel the same way by watching where your money goes when it comes to wardrobe and personal beauty.  Abiding by the plan you create together shows that you respect and care about one another’s feelings and that you’re willing to work as a team.

Have an Emergency Plan

Last but not least, always be prepared for life’s little “what ifs.” You never know when the unexpected will occur so try to build an emergency fund – ideally, it should equal the cost of living for about three months. Narvaez recommends that newlyweds “start saving or investing early on. Ideally, do so systematically from your paycheck every month.  As the saying goes, ‘out of sight, out of mind.’ Couples get accustomed to living on the difference and the result is a nice, fat bank account.”

Overall, financial planning is a joint effort that requires compromise and trust. Work on finding a middle ground so that the monetary goals you have agreed on as a couple are made possible and you can prevent one of the most prevalent causes of unsuccessful marriages in the United States.

Quick Guide to Financial Planning for Newlyweds:

• Establish your Budget
• Focus on Reducing Debt
• Be Honest with Each Other
• Set Common Goals
• Save, Save, Save!
• Respect the Plan
• Set Up an Emergency Fund

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Monica Narvaez, CFP®

Director of Financial Planning and Partner, at Strategic Wealth Advisors and Financial Advisor with Investors Capital Corporation.