Financial Tips for Couples Getting Married

​As we near the height of wedding season (May through July), those getting married should think about more than just the dress and the flowers. “Everyone planning to get married should sit down and discuss their finances and how they approach spending versus saving,” stated financial advisor Christopher Krell, CFP, CFS.  Krell specializes in bringing couples and families together to communicate about finances, discuss current and future financial planning, and prepare for and prevent the potential pitfalls that are common for those who are not financially prepared.  A 2012 study, published in the Family Relations journal, came to the conclusion that arguing about money is the top predictor of divorce.  “Examining the Relationship Between Financial Issues and Divorce” was authored by researchers Jeffrey Dew, Sonya Britt and Sandra Huston of Kansas State University. “In many cases, these couples could have avoided divorce if they’d communicated from the beginning, had a good financial plan and aligned their finances,” advised Krell.

It’s estimated that more than 2 million couples will tie the knot in 2016 and, of those, more than 800,000 are likely to get a divorce or annulment.  Krell advises couples that are getting married should:

• Work on your communication.  It's critical to be able to have honest conversations about money without getting into a fight.  Having an honest talk about money to see where the other stands financially is critical.  From there a couple can come up with a game plan.  Many marriages end over the subject of money, frankly it happens when one person is a large spender and the other is an inherent saver and creates conflict in the marriage.  These differences can often break up an otherwise healthy relationship.

 

• Get organized and come up with a budget.  Two people living together doesn't always save you money.  Sure, you can save on rent and meals, but don't just spend the left over money, you have to save some of it.  Be sure to get a list of all your income, assets and debts.  Then you can plan your spending and saving together.

 

• Pay off any credit card debt that you have as quickly as possible.  It's common for one spouse to come into the marriage with more debt than the other.  Tackle these debt reduction issues together.  Start with the highest interest rate debts and then work your way down to the least expensive interest rates.

 

• Set some realistic goals, one of which is to max out your retirement plans.  In today's environment, pensions are mostly not offered any more.  That means that your family is responsible to save enough in their nest egg to provide supplemental income in retirement.  Three things determine a family’s ability to retire comfortably, how much they have saved, how long they have saved and the rate of return on their investments.  Most people focus on the last issue which is completely out of their control.  Yet the first two things are completely within their control and are often overlooked.  Start saving at the beginning of the marriage to allow the family to not have to save as much money later in their relationship and still wind up financially independent.

 

• Update all of your old beneficiary designations.  When people are young and without their own family, they often name the parents of siblings as beneficiaries of their retirement accounts or life insurance.  Once married, they should consider naming their spouse.

 

• Get some disability insurance.  Before children, the greatest financial risk a couple faces is catastrophic medical bills and a long term disability.  Later in the marriage, when children come, having life insurance will help the surviving spouse afford the financial obligations of a home and children if necessary.

 

• Create a will, power of attorney and living will.  Every family, no matter the wealth, should have these basic documents in case of death or disability.

 

• Spend money on fun things like trips together.  Life inevitably changes after children, so go goof off and do the things that will be more challenging once the blessing of children arrives.

 
For more information on Christopher Krell visit www.cassaday.com/who-we-are/our-team/Staff/Krell-Christopher.

Top photo by:Kallima Photography