10 Financial Tasks Before Tying the Knot

October 11, 2023

Are you and your partner getting ready to tie the knot? Congratulations! As you embark on this exciting journey together, there's one aspect of your relationship that deserves some serious attention - your finances. Money matters can be a significant source of stress in any relationship, so it's crucial to get on the same page before saying "I do." In this blog post, we'll walk you through the ten financial tasks every millennial couple should complete before getting married. Let's dive in.

1. Discuss Your Financial Values and Beliefs

Before merging your lives, merge your financial philosophies. Ask each other questions like, "Why is money important to you?" or "What was your relationship with money growing up?" These conversations help uncover your values and beliefs about money, which will shape your financial decisions as a couple.

2. Assess Your Current Financial Situation

Understanding where you stand financially is essential. Take a deep dive into your financial situation by assessing your income, expenses, debts, credit scores, assets, and risk tolerance. Creating a net worth statement is a great starting point. You can also review your credit report for free annually using this site.

3. Determine How You'll Manage Your Budget

Decide whether you'll manage your finances jointly, separately, or with a combination of both. A budget is crucial regardless of your choice, as it helps you stay organized and plan your spending effectively. Maybe this blog post will help: From Separate to Joint: A Millennial Couple's Guide to Combining Finances.

4. Create a Budget

Work together to create a budget that aligns with your financial goals and values. Allocate your income into three main categories: Needs (50-60% of take-home pay), Saving Goals (at least 10% of income, but 20% gets you the gold star), and Guilt-Free Spending (20-35% of take-home pay).

5. Set Financial Goals

Financial planning is about envisioning the life you want and using your resources to make it a reality. Discuss your short-term and long-term financial goals and create a roadmap to achieve them as a couple. Dream big here! Do you want to retire early? Buy a farm and live off the grid? Take a year off to add some checks to your bucket list? If you start early and plan, these can be realities for you.

6. Clearly Define an Emergency Fund

Don't leave your financial security to chance. Determine the size of your emergency fund together, aiming for 3-6 months' worth of expenses. Your risk tolerance and employment status will influence the exact amount.

7. Make a Plan for Any Debt

Debt isn't a deal-breaker, but it does require a plan. Talk openly about your debts and develop a strategy to manage and pay them off. You can learn more about debt payoff strategies in our Two Effective Strategies to Conquer Your Debt post.

8. Review and Update Beneficiaries

Although not the most cheerful topic, being on the same page about your beneficiaries is essential. Ensure your assets go where you want them to by updating beneficiaries as necessary. This can be done post-marriage if needed.

9. Review Insurance Coverage

Discuss your insurance needs, including life insurance, disability insurance, and home and auto insurance. Make sure you have adequate coverage to protect your future together.

10. Work with a Financial Planner

A financial planner can be your guiding light through these financial discussions. Look for someone who is "fee-only," a "fiduciary," and a "Certified Financial Planner (CFP)." If you need a financial planner, we happen to know a great one!

Preparing for marriage involves more than choosing the perfect venue or cake flavor. As a millennial couple, taking these ten financial steps can help you build a solid financial foundation for your future together. Remember, open communication and teamwork are key to financial success in your marriage. Cheers to a happy, healthy, and financially secure life together!

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