One of the most memorable moments in your life is the day you get married. You spend a large amount of time and money preparing yourself for the big day and then your wedding day slips by faster than you can welcome each guest. But what happens once the wedding is over. After spending all of your life creating your own spending habits and savings strategies how well will you accept sharing your money with your partner? My partner and I tied the knot in May and since then we have come up with some simple steps that help to manage the money and minimise the heated conversations.
The first step should really happen before the wedding; you should both sit down and discuss each other’s financial position. Go out for a cup of coffee and take a notepad and pen. Start off by listing all your current credit cards and other debts (remember that this can be an uncomfortable conversation so ease yourselves into it). Once you have a list of each other’s debt look at each other’s savings accounts. The point of this exercise is not to embarrass each other or see who earns the most or who has saved the most money. The point is to be open with each other and prepare for a safe financial life together.
Assuming you have been living together for a period of time you should evaluate what regular bills each of you have and what bills can be cancelled or merged together to receive a discount. A good example is to combine mobile phone bills as most providers offer a discount when there is more than one service on a bill.
Now that you have an understanding of each other’s financial position, come up with a game plan. The easiest way is to create a simple budget. Budgeting should be easy and simple, an over complicated budget is never followed and rarely looked at, simply take all your bills and multiply each one so you get an annual figure, for example weekly food shopping which is $100 a week is multiplied by 52 to get $5,200 a year and rent which is $2000 a month is $24,000. Now total the list and divide it so you receive an amount which fits in with your payroll, for example if you get paid monthly divide the total by 12. By using this method you can each only pay your portion of the bills and keep the rest of your money for yourself. Eventually you will hopefully merge your money together but that decision is up to you.
The next step is to pay off the credit cards. If you both have a credit card, focus on one at a time. Pick the credit card which has the smallest balance and pay off as much as you can together. Every cent paid onto a credit card minimises the amount of interest you need to pay, so don’t wait for the bill just keep transferring money onto your credit card.
The next two tips I found helpful when trying to save for a house. The first is to create an allowance, discuss an amount that you each agree on as a weekly allowance. Each week you receive that amount of money into your personal account and all the other money is transferred into a high interest account to save for a house. This way you each still get a portion of money for yourself which you can save individually or spend on yourself. The final point is to be honest. When trying to create a financial plan you need to have an understanding of all variables. Also you want to have a marriage built on love and trust.
I want to conclude by saying congratulations on your marriage and I hope you have a safe and comfortable financial future together.