14 Financial Tips for Engaged Couples

 

Marriage is a wonderful union between couples who love each other and want to spend their lives together. However, marriage takes good communication skills, hard work and compromise.  Marriage has many benefits such as getting reduced rates on insurance, avoid paying estate tax, gifts between spouses are not subject to gift tax, and assets are owned jointly and other tax benefits.  

The New York Times reported that two out of three second marriages fail.  One of the major factors in couples getting divorced is due to finances.  Here is some helpful guidance on what engaged couples should discuss prior to getting married and keys to relationship and financial success. 

Should Discuss

1. Views. Discuss your views on wedding ceremony, career goals, educational goals, pets, marriage, family, health habits, children and other important topics.
2. Experiences. Discuss past life experiences that have affected you negatively to help your partner gain perspective on your thoughts and behavior patterns.
3. Bills. Determine how expenses and bills will be handled. Be honest about your financial situation. Examine each other’s spending habits and work towards a compromise.
4. Accounts. Determine if you will have a joint account or separate accounts. You can have one joint account to pay all joint bills and then have separate accounts to spend left over money however you like with the understanding that both of you are aware of the other's separate accounts.
5. Obligations. Discuss any obligations to family or others such as financial, chores, etc.
6. Assets. Determine if you want to use a prenup to separate assets you acquired prior to meeting your mate.
7. Future. Discuss future goals such as insurance needs, children, retirement and estate planning.

Relationship Success

1.  Verify. Verify bills were paid. Setup protections such as overdraft protection, renter’s insurance, and homeowner’s warranty. Keep insurance policies and warranties up-to-date
2. Communication. Avoid making assumptions. Keep open and honest communication throughout your relationship.
3. Compromise. Be willing to compromise. Marriage is not one-sided.
4. Buy insurance. Buy adequate health, life and disability insurance. Many Americans go into debt due to medical bills and lack of insurance.
5. Emergencies. Create an emergency fund to cover bills for 9-12 months to pay for unexpected expenses or if you experience a financial crisis.
6. Arguments. Do not go to bed angry. Resolve differences prior to going to sleep. 
7. Laws. Know laws in your state regarding married couples, common law marriage and taxes.