Combining Finances with your Fiancé, Tips & Tools – What to do BEFORE you say I Do

Chances are you and your fiancé have discussed finances to some degree. Maybe you have lived together already. Maybe you were just budgeting to see who could contribute what to the wedding. If you have avoided going any deeper than that, now is the time.

All of us have our finances budgeted no matter how loosely. We know our debts and investments. But we may not have even thought to mention some of them to our significant other. Since when we get married we have to take the good with the bad now is the time to plan.

Where to Begin

A great start is for both of you to get it all in writing. List all your debts, assets, accounts, investments and anything else that comes to mind. Give each other a good idea of where you will be starting out after the wedding. Also write down any insurance policies with cash value, savings bonds and the values of any valuable property you are bringing into the marriage. Other liabilities to list include loans on your 401k or against assets, credit card debts and outstanding utility bills. It is also a good idea to list anything that affects your credit record still even though you may have settled the account.

Be Honest

No one wants to admit to past financial indiscretions and feel like their partner will think less of them. However, like all secrets in a relationship, it will eventually become an issue. It is best for both of you to approach it with an open mind and honestly to get a good idea of what you are taking on together.

Finding a Common Ground

You and your fiancé may have very different ways of handling your money. Maybe you are a saver. Carefully weighing all purchase decisions and budgeting every dime. Perhaps they are a spender, living check to check and not really planning for the future. In this case knowledge is certainly power. Knowing about your intended’s money attitude and habits can help you both find compromise where there may be disagreement. Discuss which income what will come from and make a loose plan on how to pay down debts now.

Do the Math

The combining of your incomes after the marriage may put you both in a higher tax bracket. Now is the time to do the math or consult your tax professional to adjust you holdings in anticipation of your first joint tax filing.

Discuss the Wedding Budget

You have probably already talked about the wedding budget but now is a good time to reevaluate if you can really afford what you set out to spend. If you are paying for the event on credit decide if you can really afford all the bells and whistles or if the money would be better spent. If you need to cut your budget a bit consider doing certain things yourself or maybe hiring a wedding planner to find you deals and alternative ways to get you the looks and feels you want with a lower price tag. Keep track of every expense. Make a budget listing what you want to spend in each area and then notate what you actually spent. If you over spend in one area be sure to cut it somewhere else. An escalating wedding budget can spell disaster for a new households finances.

What to do with Monetary Gifts

If you live in an area or are part of a family that gives an abundance of monetary gifts at a wedding create a plan on what you will do with that money. Pay down old debts? Pay on the wedding? Splurge on things on the honeymoon. It is good to have this out in the open as different people can have different ideas about sudden windfalls of cash. You may think of it as found money and free to spend, your spouse may think it should be used to pay down debts as quickly as possible. Best to decide in advance.

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