There’s an endless list of tasks to be checked off in the lead up to the big day: seating charts, flower arrangements, bridesmaids’ dresses, finances? It may not seem important, but how you and your soon-to-be spouse merge your finances is not something you want to neglect.
Forget the dishes: the leading cause of friction in relationships is money. Studies have even shown that more than one-third of people who experience relationship stress admit money is the root of their problems (but not all evil).
You can avoid arguments in the future by working through what you want your family unit’s finances to look like now. If you need help, a financial adviser can help you build one. Think of a financial adviser like your monetary couples’ therapist. Where you have an issue, they can help you find a solution – together.
Merge it all
You might be thinking you’ll join your accounts once you’ve got the ring, but your partner may want to keep some financial independence – which is why it’s important to have a shared financial plan.
Many aspects of your finances can be merged to save money. Rather than living with two separate financial set-ups under the same roof, consider consolidating things like your mortgage and investments. You might be on two different health insurance plans, have two cars when you only need one, or paying for two individual gym memberships when your gym offers a discounted one for couples.
Work out a budget
Everyone has differing career aspirations, salaries and levels of determination. When you first merge your finances, there may be some friction trying to work out how much to spend and what on.
This is where a budget is handy. Your financial adviser can draw one up if you can’t agree on one together, and it will help you see eye to eye when paying off existing debts and covering daily expenses, as well as setting yourselves up for a comfortable retirement.
It doesn’t have to be the strictest diet either: think of a budget as a blueprint for a construction. It’s designed to give you a model to work towards. Having shared financial goals as reference points will make it easier to stay accountable.
Get to know each other (financially)
You’ve learned if your partner is a daddy’s girl or mumma’s boy and what they’re like around their friends, but there’s one other big relationship you need to know about: have you considered how your partner is with money and if it aligns with your own views?
Your partner may be more financially ambitious and therefore more comfortable taking risks, while you might be more interested in keeping a safety net for yourself. Understanding where you differ can be helpful when planning major financial decisions like debt.
Prenups (yes, really)
Not just for billionaires. In Australia, a prenup is officially known as a binding financial agreement, or BFA.
A BFA records how your assets would be divided if you and your partner were to split, and includes the prenuptial agreement, postnuptial, guardianship and all other provisions.
BFAs are mostly recommended for couples who come from different backgrounds or previous complex relationships, such as ones involving children. Asking your financial adviser to meet with you and your lawyer will ensure any legal and financial aspects are not contradicting.
The final word before I do
Sorting out your finances may seem like the least romantic thing you can do in the lead up to your big day, but it’s important to make sure there are no surprises in store once the honeymoon glow wears off.
Think organising your finances together will start a bigger fight than when you said your mother-in-law couldn’t wear a white dress on the big day? A Green Associates financial adviser can help plan your financial future. Get in touch to get started today.