5 Tips for Merging Finances as Newlyweds
Congratulations on your marriage! Merging finances is an important step for newlyweds that can help them achieve their financial goals and strengthen their relationship. However, it can also be a daunting task. By following these five tips, you can make the transition smooth and stress-free.
Be honest: The most important thing in any relationship is honesty, and that includes your finances. Before you merge your finances, be honest with each other about your income, debt, and spending habits. This will help you avoid any surprises down the road. For example, if one partner has significant debt, it's important to discuss how to address it together.
Marry your bank accounts: Once you're honest with each other, it's time to marry your bank accounts. This doesn't mean you have to share everything, but it does mean opening a joint account for shared expenses. This will make it easier to track your spending and budget together. Automating direct deposits, housing and utility payments, and an “allowance” for each partner is a good first step to managing finances together. Additionally, consider using a budgeting app or software program to help you track your spending.
Make a plan for your financial future: Now that you're married, it's time to start thinking about your financial future. What are your short-term and long-term goals? Do you want to buy a house? Start a family? Retire early? Once you know what you want to achieve, you can start making a savings/investment plan to get there. Consider meeting with a financial advisor to help you create a plan that works for you.
Start budgeting together: Budgeting is a great way to get on the same page financially. When you budget together, you will bring awareness to where your money is being spent. This will help you avoid any arguments about money down the road. Consider setting up regular budgeting meetings where you review your spending and make adjustments as needed.
Be prepared for unexpected expenses: Even with a solid financial plan in place, unexpected expenses can still arise. It's important to be prepared for these expenses by setting aside money in an emergency fund. This can help you avoid going into debt and keep your financial goals on track.
Merging finances when getting married can be a challenge, but it's an important step in building a strong and stable relationship. By having an open and honest conversation, creating a budget together, deciding how to merge your finances, setting financial goals together, and being prepared for unexpected expenses, you can create a solid financial plan for your future together. To learn more about our financial planning process and how we add value to young high earning couples, schedule an introductory call to see if we would be a good fit for you.
