It’s a story we hear quite often from newlyweds. One person is ready get their financial lives in order after the wedding, and the other just isn’t all that interested. It’s an awkward position to be in for sure, particularly when you’re working to combine everything else in your new married life. So how do you get your spouse to move toward financial organization before you start pulling your hair out? Deep breath…we’re here to help! The key is to make small changes and adjustments in the beginning (baby steps!), and steadily build from there. Before you know it, managing your finances together will come more naturally.
Here are our five recommended steps for getting your finances buttoned up with your new spouse:
Step 1: Purge the piles: Go through those stacks of documents you’ve been throwing into boxes and filing cabinets all these years. Save the essential items in electronic format and on paper (i.e. tax returns, year-end investment statements, active deeds, insurance policies, big-ticket item receipts, marriage license, wills, passports). Scan any other important information, save an electronic version, and shred the paper.
Step 2: Go paperless: Do you both get paper copies of account statements each month? Go paperless to cut down on the excess mail and keep things tidy. Contact your custodians and request to be switched over to electronic statement delivery. Take this time to look over your accounts with your spouse while you’re at it, and start getting on the same page with what assets you have.
Step 3: Simplify: Depending on what you and your spouse had going on before your wedding day, you can most likely begin to simplify some things. Determine what’s still relevant to your married life, and make sure everything’s on the up and up. Here are a few tasks to consider:
- Pay off a credit card and close the line of credit;
- Update any beneficiaries on retirement accounts and insurance policies;
- Review and evaluate your car, home, and life insurance policies;
- Check your credit scores;
- Review your monthly bills and make any necessary updates.
Step 4: Talk it out: Have an honest conversation about what steps you’ve taken so far and what else you’d like to accomplish. Come up with a plan for paying monthly bills, and start thinking about the future. What do you expect your income to look like in five years? What have your taxes been like in the past, and how will they change now? Do you have any goals you’d like to accomplish: buying a house, starting a family, traveling the world, replacing your car? Discuss any debts you have, how you’ve managed them so far, and how you’ll pay them off. The more open and honest you are about your expectations for yourself and your spouse, the better off you’ll be.
Step 5: Reset your budget: Now that you’ve gotten everything in order, look to reset your spending vs. saving habits, together! A good starting point is a 50/30/20 split of your combined income. 50% goes to living expenses, 30% goes to spending for other things, and 20% goes into savings for those financial goals you’ve fleshed out.
If it takes some time to accomplish all these steps, that’s completely understandable. It’s a lot to do. Start slowly and don’t get overwhelmed with the process. Know that the most important habit to build in a marriage is to keep the conversations about your finances going. Perhaps you’ve made mistakes in the past, or maybe your spouse has. Now’s the time to come up with a plan to get back on track together and stay there.
If you’d like any guidance along the way, don’t hesitate to reach out. Congrats on your marriage!