Monday, August 18, 2014

Financial Planning After the Engagement Ring, Before the Wedding

marriage financial planning

Things to Know Before Saying 'I Do'


My wife and I are coming close to 20 years of wedded-bliss together, and over that time we've learned that talking things through with financial planning maintains a happy marriage as well as a healthy budget. However, this was learned over the years. If we had been more savvy in the beginning, I have no doubt we would be much better off. Of course we were young and in love with our heads in the clouds, but it would have been nice to have been thinking about money management for our futures as well.
Communication Before the Wedding
 
It can be uncomfortable to talk about financial management with a significant other, but it is a skill that must be learned and used regularly. Knowing what types of debt and assets each partner brings to a new relationship is important, as is being aware of factors such as individual credit scores, current debt to income ratios, and if there is a history with finance company collection attempts. It can be surprising how much debt a young person can create with car payments, credit cards, and likely college loans. Knowing everything up front begins the relationship on the right foot toward financial planning, and helps build a family budget that works to align individual responsibilities with a married couples goals.


Financial Planner
 
Step one to building financial well-being is to gain the services of a financial planner. These professionals are trained to assist with everything from advising on investments to structuring a budget for a household. In order to make the most of the initial appointment, be sure to gather as much information as possible concerning current finances. The more complete the picture, the more a financial planner can do for the client. Once the money management details are shared, expect to develop short and long term budget goals that will include debt reduction, college tuition savings, and portfolio investment for retirement.


Budgeting for Children
 
My kids came along after a few years of wedded bliss, but of course this is not always the case when considering financial planning. Considerations run the gamut where children are concerned, and the earlier the planning begins, the better off a parent will be. Be sure to begin a 529 plan as soon as possible, such as the ones run by Fidelity. These are tax-advantaged savings programs designed solely for funding a child's college experience. Is your house large enough, and located in a good school district? How about a family history of orthodontia treatments? Will children go to summer camp? Learn to play the piano? Oil paint? The more possibilities that are budgeted for now will be realized in happier children in the future.

Also, now is a good time to start saving for their weddings. In relation to financial planning goals, those can get expensive, after all.