I became more serious about my finances when I proposed to my wife nine years ago. The process of saving for the engagement ring was significant, and I quickly realized that plenty of expenses would arise as we began planning our wedding. Luckily, my wife and I shared similar views on money management; however, many couples fail to discuss their finances prior to marriage.
I know that engaging in financial discussions with your partner can be challenging, but it’s essential once you’re married. Many aspects of your financial life should be shared, and if you treat expenditures as separate, it may lead to complications in the future.
Here are four essential financial steps to take after tying the knot:
Define your financial objectives
You might assume that marrying someone would mean you understand their financial goals, but that often isn’t true. It’s wise to examine this situation from a practical perspective. For instance, if one of you has credit card debt, it’s typically best to combine your finances to tackle that debt quickly.
Even if you have no debts, it’s critical to discuss what you both want to save for and your timelines for those goals. Whether it’s purchasing a house soon or embarking on global travels before settling down, it’s beneficial to create a list of priorities that matter to both of you before crafting a financial plan.
Update your benefits and designations
This task might not seem urgent for newlyweds, but promptly updating your benefits and beneficiaries is essential. Different employers have varying policies, and many require that you add your spouse or child within 30 days following a significant life event. Failure to do so may result in added complications later to include them.
By adding your spouse to your benefits, they can immediately utilize your drug plan, reducing their out-of-pocket expenses. Be aware, however, that moving to a family plan will typically result in higher premiums.
Don’t forget to designate your spouse as your primary beneficiary in case of any unfortunate events. Additionally, it’s wise to select a contingent beneficiary should both you and your spouse pass away simultaneously. While this may feel uncomfortable to consider, addressing it is necessary.
Determine your banking arrangement
There is no universally correct approach to managing bank accounts; what’s most important is that you establish a system that suits you both. My wife and I maintain separate accounts while also having a shared account for joint expenses. Be sure to assign the responsibility of paying bills to avoid late fees.
It’s also important to discuss your investment portfolios. Now is an excellent opportunity to reassess your investments to ensure they align with your combined financial profile. While investments tend to be personal, it’s possible to utilize joint funds to enhance specific accounts like your RRSP or TFSA.
Concluding thoughts
After getting married, many of the tasks mentioned above may slip down your list of priorities, but they still require your attention. Fortunately, most of these steps can be completed quickly. Remember, discussing finances should not be a one-time occurrence; regular conversations with your partner will help keep you both informed and aligned.