We are in the midst of what the wedding industry is calling the “summer of love,” an anticipated influx of celebrations that were originally postponed due to COVID-19. This surge in weddings means many newlyweds will soon be jointly navigating their finances.
Outlining financial goals as a married couple is a worthwhile exercise to identify short- and long-term opportunities while also helping to avoid money-related misunderstandings down the line. After tying the knot, consider these five tips when planning your financial future and happily ever after.
Create a budget
Your budget is an important tool to use for achieving your financial goals. Whether you have separate or joint bank accounts, creating and adhering to a household budget is key. Determine your shared monthly income and make a list of your expenses categorized by how often they recur. Include costs such as monthly bills, car payments, grocery shopping, rent/mortgage payments, insurance, etc. Using a budget calculator can help simplify the process and help ensure you stay on track monthly and annually.
Discuss joint vs. individual accounts
It is common for a couple to open a joint bank account after getting married, but some like to maintain a level of autonomy. The best approach is having a conversation to discuss what both partners want. Married couples with joint accounts may find it easier to monitor their finances as all expenses come out of the same account. Shared, recurring expenses including rent/mortgage payments, groceries and utilities can be withdrawn from this account. But each partner can still maintain an individual account to fund personal expenses if desired.
Track joint expenses
It can be tough to keep track of your own expenses, so managing expenses as a couple can be an adjustment after marriage. Tracking expenses is not just about checking your balance, but also knowing where your money is going, and if you are staying on target with your budget. A spending tracker might be helpful in staying on top of your finances. Setting goals, developing money management strategies, and following your budget requires a consistent team effort.
Calculate an affordable mortgage
As couples consider their living arrangements, many will choose to purchase a home. A mortgage is likely going to be one of the largest loans you will ever take out, and it is important to know whether the payments will fit within your budget. As an initial step, try using a mortgage affordability calculator to get a better picture of how your anticipated mortgage will impact your monthly finances.
Start an emergency fund
An emergency fund is a savings account created for unforeseen expenses. Whether that be car trouble, unexpected medical bills, or sudden unemployment, this fund is meant to serve as a buffer to avoid increasing or accumulating debt. This account can start small and grow slowly over time, so work with your partner to determine how much you will save in your emergency fund and how often. It can go a long way in reducing anxiety during unplanned and stressful life events.
Managing finances as a couple does not have to be challenging. Be open and honest with your partner to ensure you’re making choices that are beneficial for you both and find the right tools to help you throughout the process. For more financial tips for newlyweds, please visit Atlantic Union Bank’s free resources available through Banzai.
Karen Bill is a Consumer Banking Regional President at Atlantic Union Bank which is Virginia’s largest independent bank and the only statewide regional bank in Virginia. Bill has proven herself as a financial industry leader for over 20 years driving revenue growth by designing innovative sales campaigns, strategies and analyzing performance gaps and developing strategies to increase sales performance.