Financial Planning for Engaged Couples

the word financial planning on top of an arrow point toward the right to indicate growth.

For anyone focusing on all the fun of the big day, it’s also important to talk about the more serious conversations that come with wedding planning. It is vital to understand where you both stand on key topics, align on where you want to be in the future, and figure out how you plan to pool your income after the big day. Financial planning for engaged couples is just as important as planning the wedding details.

Financial Questions to Ask Before Marriage

Financial honesty is incredibly important but unfortunately, many couples won’t broach this topic until it’s too late. In fact, according to the National Foundation for Credit Counseling, nearly 70 percent of adults said they had negative feelings about discussing money with a fiancé.

Clearly, most consumers are unsure about how to talk about money with other people. Chatting about your finances doesn’t have to be a negative experience. Below, you’ll find key financial planning advice for engaged couples:

Are You Planning a Financially Responsible Wedding?

Costs can add up quickly when you’re planning a wedding, especially if you’re inviting all of your friends and family. If you’re using a credit card to help pay for the event and you want to avoid building up additional debt, it’s worth looking into which cards offer wedding-specific rewards.

For instance, there are several credit card companies that offer bonus points on common wedding costs, like:

  • Catering
  • Dining
  • Entertainment
  • Hotel booking
  • Car rentals

If you’re having a destination wedding, many major hotel brands allow you to earn points by having your wedding at one of their hotels. You should always consider using your built-up reward points on paying for some of your honeymoon costs. Before you sign up for a new credit card, look at all the variables and perks.

Have You Discussed Your Current Debts?

When it’s time to have the money conversations about debt, take an easygoing approach. Rather than leading with pointed questions like, “How much debt do you have?”, start by asking your partner about how they view money and how they feel about spending versus saving. The national student loan debt crisis burdens many young couples so, make a plan to pay back your debt at a comfortable rate.

Once you’ve established how you each feel about money, you can then have an open, thoughtful discussion about what you want your financial worldview as a couple to look like.  

Did You Make a Plan on Handling Your Debts?

Disclosing your debt and making a plan to pay it down is extremely important. If you or your partner has debt, it’s imperative that you have a frank, honest discussion about the amount of debt you have and what kind of debt it is.

It’s best to find a low-stress time to talk about finances. Avoid ambushing your fiancé after you’ve had one too many glasses of wine and you’re feeling stressed about your day. Pick a time and place that feels good for both of you, talk honestly, calmly, and get it all out in the open, without judging your partner or losing your cool.

You should also work together on creating a plan to pay off your debt quickly. Double down on any credit card payments to eliminate your debt as quickly as possible.  

When it comes to debt and marriage, you should also be aware of the main rules: The IRS states that if a married couple opens a joint account or gets a shared credit card, both parties are responsible for paying back any debt.

Have You Shared How You Were Raised or How You’ll Raise a Family?

Family plays a large role in how the average consumer perceives money. For example, children that had allowances and were encouraged to manage their own money are more likely to turn into adults that know about budgeting. On the other hand, children from a family plagued with debt are more likely to know how to spend less as adults.

Much of this conversation should come to light prior to an engagement, but you should also take this time to talk about your family’s future. Some of the bigger questions about family and money include:

  • Do you plan to take care of your aging parents financially?
  • Do you loan money to your siblings?
  • Do you pay child support or alimony?
  • Are you planning on paying for your children’s college fund?

You and your partner should be on the same page when it comes to family situations that may crop up in the future.

Plus, the steep costs of raising children is no secret, and if they are going to be in your life eventually, you should consider starting a savings account as soon as possible.

Have You Agreed On Future Financial Goals?

As a couple, you’ve likely discussed life goals already, but chances are you probably haven’t discussed your financial goals yet.

Sit with your partner and take stock of the different goals you each have. Are they short-term, mid-term, or long-term goals? Most marriages result in a combined money pool. In order to use that money responsibly, you should both be in sync about big money milestones.

Have You Explored Each Other’s Credit?

Once you’re married, you’ll continue to have your own credit file and reports. This means that if one partner faces a credit score penalty, the other will not.

If you and your partner decide to share joint accounts like loans, mortgages, and credit cards, it’s crucial to discuss where you both stand in terms of credit. Just like with a private account, bad credit will affect your joint account interest rates. Be sure to talk about how you can improve a bad credit score if this is the case.

Have You Started Budgeting Together?

Spending the rest of your life together means learning how to manage your money as a unit. And one of the all-time best things you can do as a couple is to create a budget together and stick to it.

Sit down together and take stock of all of your bills, both combined and individual. Determine how much money both of you have coming in. Whether you choose to keep your bills separately or work on them together, having a clear picture of your ins and outs will help you avoid any difficult money fights in the future.

Do You Have a Retirement Plan in Place?

It’s never too early to start discussing retirement plans. How you manage your money prior to retirement will greatly impact your retirement savings, so learning how to budget and save together is crucial.

Whether you each have your own 401k or you’re adding funds to a spousal IRA, committing to on-time payments and following your budget is crucial. Pro tip: schedule regular discussions about your combined budget and any upcoming big expenditures so that you both stay on track for the future.

It’s Never Too Early to Have Money Conversations as a Couple

Marriage is a big step in both of your lives. No matter what your future holds, it’s important to be prepared mentally and financially.

If you still need help solving money issues in marriage, contact our expert counselors today to learn how you can move into your future in control of your credit, debt and finances.

Article written by
Melinda Opperman
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined in 2003 and has over two decades of experience in the industry.

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