YAY! You’re engaged. I’m so excited and happy that you’ve found your forever person! But as much as I hate to burst the happy bubble, there are a few things in the financial arena you and your intended need to take care of before you giddily traipse down the aisle.
I know that talking about finances is not always an easy thing to do, but if you are committed to spending the rest of your life with this person, you need to get comfortable with these topics. So let’s see what steps you need to take to start your marriage on the right financial footing.
- Have “the talk”. Each of you should have the 4-1-1 on the other’s accounts (checking, savings, CD’s, investments/IRA’s, mortgages/loans, insurance, etc). In addition, you also need to know where their non-financial documents reside (birth certificate, titles/deeds for homes, cars; safe deposit boxes, etc.) are located. And you both need to understand how you each envision a successful future in the financial realm. Success is not necessarily amassing huge wealth, it could be as simple as having enough to afford an adorable forever home with only a 15-year mortgage.
- Set up your financial structure/responsibilities now. It’s not uncommon for one partner to take on all the bill paying, while the other is tasked with keeping an eye on investments. But you need to hash this out in the beginning and be willing to adjust as your marriage and your life change over the upcoming years.
- Create a “rainy day” fund. It’s recommended that you have six months worth of income available just in case the worst happens. You can easily set up a savings account that you both contribute to with automatic deposits from your paychecks, at a separate bank than where you normally bank. This makes the saving the money almost seamless and since it’s not a bank you frequent, the temptation to just take a little out is lessened!
- Protect you and your spouse with life insurance. Talk to a professional insurance agent about what type of life insurance and how much you will need. Part of the commitment of marriage is to care for each other “’til death do you part”. Life insurance is a way to ease the loss and provide a secure future for your spouse and family.
- Make/update your will. If you already have a will, now is a time to review and make any changes that may be necessary now that you are to become a married unit. If you do not have a will, it’s time to get one. A will helps to ensure that there are no misunderstandings or battles upon your or your spouse’s demise.
- Time to find an insurance agent. Maybe your life has been pretty simple and you haven’t felt the need for an insurance agent, but with marriage, your life might be a bit more complicated and an insurance agent can really help you navigate the ins and outs of protecting you, your betrothed and your future. And don’t forget to ask us about insuring that engagement ring!
Yes, some of these conversations seem difficult, especially when thinking about life insurance and wills as you are embarking on the beginning of your new life. BUT, having these conversations now and setting up plans that fit your new family will save heartache and provide financial security in the future. And that is a gift that two people own to one another.