Managing your money on your own can be difficult on its own but throwing marriage into the mix takes it to a whole new level. Both you and your new spouse have worked your own way before, and starting to work together is often difficult. Money can be a challenge for many marriages, and it is a common reason for divorce. The good news is that there are many ways to work together, and it starts with talking honestly with each other.
discuss financial goals
Take a moment to talk about your financial priorities. It’s important to make sure you have the basics in place like an emergency fund and retirement plan. An emergency fund will prevent you from going into debt for unexpected expenses. Setting money aside for retirement will help you reach your retirement goals when the time comes. Another goal to focus on is getting rid of debt. The first area to focus on should be high-interest debt, such as credit cards.
If you have student loan debt, you can refinance with a new loan to cut down on monthly expenses. You can see if refinancing student loans with NaviRefi can get you a better interest rate or more favorable repayment terms. After you’ve covered these basics, you can talk about other goals as well. Are you looking to go on a vacation or buy a home in the future? Take some time to write down all of your goals and agree as a couple on which should be prioritized. If travel is important to both of you, you can invest more in your travel fund.
Determine whether you will combine funds
It’s a good idea to take some time to think about whether or not to combine your finances. Depending on your situation, this decision will look different for each person. Sometimes couples decide to keep things separate and have only one or two shared accounts. Other times, couples co-sign everything and share credit cards and bank accounts.
be honest with each other
Whether you decide to combine things or not, it’s important to be honest with each other about your situation if you want to make sound money-related decisions. If either of you has a lot of debt, you need to bring it up to your spouse. Of course, you can’t be honest with the other person if you’re not first honest with yourself. Many people are in denial about their debt and avoid looking at it because they feel guilty or fearful. If you’re not sure where your own finances stand, it’s time to take an honest look at them. When you talk with your partner about your finances, it’s important to be judgment-free. Even if your spouse has made poor decisions in the past, be kind in your communication so that both of you can make a plan to move forward.
Budgeting becomes even more important after marriage. It may not be pleasant at first because budgeting is stressful for many people. It can take time to figure out how to agree on your budget. You’ll start by combining all sources of income after eliminating taxes and benefits. You can then assign a purpose to each dollar, including savings. After creating the budget, you should not have any money or expenses. This prevents overspending, and you can hold each other accountable when you both agree on a budget.
check in with each other often
One of the hardest parts of managing your money together is deciding what you’ve agreed upon. The two of you need to review your spending and budget every month while talking about money. You might consider meeting once or twice a month to talk about your money and see how well you did during that time. You may realize that you are overspending in a certain area and want to cut back. On the other hand, you may find that a portion of your budget is no longer sufficient to meet your needs and should be reevaluated. Your situation will grow and change, and so will your budget. Being able to work together and communicate openly will lead to success with your finances.