Ah, it’s Valentine’s Day and romance is in the air. Sweethearts everywhere will mark the day with long-stemmed roses or chocolate covered strawberries. But for many couples, it’s the day they take a big step by saying “yes” to beginning a new life together.
According to WeddingWire, Valentine’s Day is the second most popular day of the year to pop the question. Getting engaged is an exciting time with much to celebrate and plan—including talking about money. “While discussing finances is probably not at the top of most couples’ to-do lists, it’s an essential part of building a shared future,” says Brent Hoskins, Regional Investor Center Manager.
Money Matters for Financial Harmony
To help with those discussions, Brent shares a few considerations to pass along to the newly engaged couples you know.
Understand your partner’s fiscal philosophy. Use your wedding budget as a starting point for approaching money matters and developing positive habits. Are you planning a simple ceremony or a grand affair? Either way, creating a budget for the various elements of your wedding day offers an opportunity to determine whether a cost is a must-have or a nice-to-have. Outlining needs and wants is a great way to understand each other’s spending habits.
Determine how to manage checking accounts. Some couples prefer the independence that separate accounts can provide, but there are two sides to that decision.
- Advantages of separate accounts can be that couples are dividing labor and sharing responsibility for different bills. This system can reduce stress and even the financial workload. Additionally, it may reduce the opportunity for errors or overspending as only one person is writing checks and entering transactions.
- Disadvantages to having separate accounts can be you are not staying financially involved. Both spouses should be aware of which bills are being paid, how much—and if—a balance is being carried forward. Another downside might be a conflict of style. While one of you may keep a close eye on balances, the other may be content with an occasional check in. One of you may pay bills last minute, the other might pay days before they’re due.
Even if you have separate checking accounts, consider having both names on each account for access in an emergency. Furthermore, consider adding your spouse as an owner to any other accounts and adding his/her name to beneficiary designations when applicable.
Have a candid conversation about debt. Whether it’s student loans or credit card balances, you should review your obligations so there aren’t any surprises. Going forward, you should be on the same page in terms of how to prioritize paying off any current debt and taking on any future debt. Of course, developing a budget is key because it allows you to determine how much, if any, income is currently available to pay down debt.
Map out your financial goals and what you’re saving for. Now that you’re planning together, you’ll want to revisit any goals you had on your own to ensure they’re in alignment. Factors that fall into the equation should include whether you’re saving to buy a house and what you want your retirement to look like. Additionally, if you have children or plan to have some, you’ll want to discuss child care costs and saving for college.
Invest in Your Future Together
Communicating about money is one of the top challenges for even the most open and articulate couples, but it’s well worth it to understand each other’s expectations.
When it comes to your investing goals, our Investment Planner tool can help you and your new spouse discover your investing profile and help you plan for retirement, college and more.