Before a happy couple tie the knot, there is another not-so-romantic topic that all newlyweds or engaged couples need to think about: finances. More than a quarter of married couples say disagreements over finances are most likely to lead to arguments, according the American Institute of CPAs.
Patrick Bet-David, a financial advisor, author and CEO has made financial literacy his crusade. He says talking about finances not only reduces fights, but can also get you on a path towards a successful financial future.
His tips on covering the basics:
Know Each Other’s Financial Histories – Gather all of your paperwork, statements, bills and personal financial information and really evaluate your finances so you both are on the same page. Do either of you have student loans or credit card debt? What kind of retirement plans or saving vehicles do you contribute to? How much are you paying for your cell phone and cable bills? Do either of you have an emergency fund? What is your general attitude about money?
Beneficiaries – Revisit all of your accounts from retirement plans and insurance policies, and update your beneficiaries where you see fit.
Insurance – Review your medical, life, and car insurance plans. You may find that combining coverage may save you money or that your plans have some overlap.
Name change – If you or your spouse is opting for a name change, it is important to notify the proper government authorities for example driver’s licenses. You will also want to notify your financial institutions.
Joint or Separate Accounts – or Both? – Long gone are the days when it was assumed that marriage meant newlyweds would open a joint bank account and share credit cards. Some couples are now keeping separate accounts while others still choose the traditional route, and everything in between is a viable option.
Determine a Budget and Financial Goals – Getting married is a good time to start the invaluable practice of budgeting. Once you have a joint budget, you can evaluate your discretionary income and determine both short-term and long-term financial goals.
Bet-David says if you can’t afford it, don’t buy it, and in any financial discussion, the key is open communication between both partners.