Part 1 of the Life Happens series.
Saving for retirement, or any other future goal, is a long-term commitment. It’s easy to stay on course when your investments match your time horizon and your risk tolerance. However, a critical time to review your savings plan is before you head down the aisle to make another commitment—marriage.
New Life Together = New Goals
Starting a new life with someone special is exciting. While planning the wedding can be fun—and sometimes stressful—it’s critical for you and your partner to discuss finances before saying “I do.” Unfortunately, 68 percent of engaged couples have a negative opinion of discussing money with their future spouse. In fact, five percent said having “the (money) talk” may cause them to call off the wedding.
Money might be one of the most important issues to discuss before you tie the knot. While it can be a source of contention even for the happiest of couples, you can potentially avoid conflicts with these tips.
Find common ground. It’s important to understand each other’s philosophy about money. That includes knowing things like whether each of you is a saver or a spender. Do you agree about the importance of saving for the future? How do you feel about debt? What about taking risks with your money? Knowing where each partner stands can help you overcome any differences that could be an issue in the future.
Create a budget. Yes, we went there. Budgeting isn’t the most fun, but having a plan is critical. Spend some quality time on a budget for your combined incomes and expenses. If you already have individual debt, this is where you need to plan how you will deal with it. Also, remember that retirement saving should be a priority in your budget because it will affect your future together.
Save more. It’s a good idea to talk about your future goals—both near-term and down the road. If you and your spouse are both near the start of your careers, that’s great for your future. You have more time to save for things that matter. If you’re further along in your careers, you may want to consider finding additional ways to increase saving, especially for retirement.
Think ahead. Regardless of how long your honeymoon phase lasts, review your finances often and make changes when necessary. Other life events can affect your plan, like having children, so it’s a good idea to review where you are at least once a year.
As you start your new life together, many things will change. However, one thing needs to stay the same: staying committed to your financial goals.
Take advantage of our Investment Planner to build your investment profile for your retirement or general investment goals.
Read the full Life Happens series: