Now that you are getting married, have you thought about your future financial plans as a couple? What about who will pay for what? Who will take care of the wedding expenses? Have you talked about buying a house or car? What about insurance, final will, pre-nuptial agreement, stocks, bonds, shares, debts etc?
Getting married is easy; planning for the years to come is entirely a different story. The couple should ensure that they have carefully laid down a financial plan for the future. Marriage is not all about finances, nonetheless. Because if it is just about money, what's with promise to cherish each other for better or for worse, for richer or for poorer? However, the couples should also seriously consider financial marriage planning so that this aspect of marriage will not be a cause of anything that would break the vows you took at the altar. Here are some important things you should consider on financial marriage planning.
Paying for the wedding. Why do so many people spend too much on a one-day event when they can use the money to some long-term investment such as house mortgage or invest on a business? An average American couple spends $19,000 for wedding alone. Why not put this money to pay off debts? If you plan well enough you can cut the wedding cost up to a minimum without sacrificing the dream wedding you want achieve. If you can make your own invitation, ask a friend for the photography and video coverage, ask your mom or your future mother-in-law to bake the cake, etc, you can make a lot of savings.
Pre nuptial agreement? It is very popular among the rich but lower and middle-class couples should also take serious consideration about this matter. Of course, you do not think of divorce when you are getting married, don't you? However, when or if you get to the point that you are heading to divorce court, it will save a lot of money and emotional battle when you sign a pre-nuptial agreement. Again, marriage does not always lead to divorce but think of pre-nuptial agreement for the moment and the good things it will give to both of you.
Marriage Tax Penalty. The couple's income is combined as though it is earned by one person after they get married. So if you are earning less than your fiance's now, be prepared to fall under his or her tax bracket after the wedding. Yes, it is cheaper to stay single. That is why you need to discuss this together so that you can plan it out carefully. The good news is, marriage tax penalty fill gradually be passed out as the years go by.
Household finances. Who will pay for the utility bills? Is it better to joint credit card accounts? Do you need to maintain a shared bank account? What is the share of each spouse to the budget? How much from your income will go to savings? How much debts you both have? How will you pay for them? Before tying a knot, sit down and discuss these issues.
Financial goals. Setting financial goals as a couple early will put your financial plans into right perspective. Set short-term goal like buying a house and college education, and long-term goal such as when and where you want to retire. Consider the option of consolidating your finances. If it works for both of you, go for it.
Safety net. Health, life, and disability insurance: there are some types of insurance you can consider. You may already have these insurance but it is worth to review what coverage you need to cover joint responsibilities.
Finally, why not hire a financial planner? Financial marriage planning can be done objectively and effectively if there's an expert sitting with you throughout the process. Financial experts will be able to assess your financial standing and will be able to give realistic goals based on the data you provide. Fees for financial planners vary from firm to firm. To give you an idea, a Certified Financial Planner charges an average fee of $100 per hour; $300 for a plan that covers a specific area; like retirement planning; $700 for a comprehensive financial plan.
