Are You Financially Ready to Get Married?

Every good marriage has transparency, honesty and open communication at its foundation. So if you want your marriage to get off to a good start, it’s time to start talking with your fiancé about money. Studies have shown that money is the number one cause of stress and arguments in a marriage. Take that to heart, and don’t make the mistake of thinking that your marriage will somehow be immune to financial mismatches.

Take the following four tips into consideration, and use them as a launchpad for ongoing conversations with your partner about how you will manage your personal finances together.

1. Discuss What it Means to Live Within Your Means

An ideal place to begin that conversation is with the topic of living within your means. If you are spending more money than you earn every month, you are heading toward a bad place.

Most American families are barely surviving, are living paycheck-to-paycheck, have no retirement savings and are carrying thousands of dollars in credit card debt. Obviously, something is wrong with this picture. Many couples wait until their finances are in trouble before they even begin to talk about how to manage their money. But by then it is often too late.

So take the initiative before you even tie the knot. Talk with your fiancé about your financial goals and how you expect to achieve them.

2. Create a Budget Together and Stick to It

Couples who fail to track their income and spending and incorporate those numbers in to a monthly budget are destined to experience financial difficulties. No matter how much money you make, you will find a way to spend it all — plus a little more — if you are not planning out a realistic budget and disciplining yourself to stick to it.

There are many way to create a budget. You can use computer programs and smartphone apps that will track every penny that comes and goes. You can also securely link your bank accounts, credit and loan accounts along with your investment accounts, enabling you to look at your entire financial picture at once. With your smartphone, you’ll be able to scan and organize receipts which will automatically update all the numbers as you progress through the month.

You can also just use a spiral notebook and a pen and log it all in by hand once a week or so. Either way, the idea is the same. Track everything. Check the numbers every week with your partner so that you always know where you’re at and what bills and purchases are coming up. By closely watching your finances and communicating with your partner, you’ll avoid surprises, late fees, NSF fees and all the arguments that come with them.

3. Commit to a Saving and Investing Plan

Recent surveys have shown that most Americans don’t even have $500 set aside for emergency savings. That is a scary statistic, because something will always go wrong. As a result, people turn to credit to bail them out. But then they end up paying interest for months and years to come. Before they even have a chance to pay off one financial emergency, another comes along, and the debt compounds.

This is a vicious cycle that destroys marriages, and it is one that you must avoid at all costs. Making the commitment to live within your means is one of the most important decisions you will make, and setting money aside in savings is a necessary part of that concept. Start small if you have to, but don’t put it off for later.

4. Make Sure You Have Adequate Insurance Coverage

Insurance is another necessary expense these days. When a major catastrophe strikes, having the wrong type of insurance, having inadequate insurance coverage or having no insurance at all is a financial death sentence. One car accident or one broken water pipe can alter the course of your life, and having proper insurance coverage is the best thing you can do to prepare and protect your assets.

Even if you have no assets, the courts can take money straight from your paychecks for years to come if you are found to be legally liable for damages. So insurance really can be a lifesaver.

Talk with your partner about your insurance coverage. Consult an insurance specialist and get some cheap insurance quotes to find the right coverage to meet your needs.

Getting married is a major life event. As you prepare to spend the rest of your life with a partner, you must make responsible financial decisions, as these decisions will affect both of you. Follow these financial tips and make open communication about finances a regular part of your relationship.