As the wedding date approaches, a discussion about future financial plans is usually the last thing on the minds of the bride and groom. Yet, money is at the top of the list of leading causes of divorce. So, while discussing money with your future spouse seems unromantic, it is a worthwhile investment in your future happiness and wealth.
We have listed ten financial topics to discuss with your future husband, before he puts a ring on it. If you work through these, you will be left with a solid foundation to reach clearly-defined, mutually beneficial financial goals.
1. How much money do you earn?
This is a difficult question to ask, but it is important. If you’re going to spend the rest of your life together, you both must be open and honest about what your earnings. Each of you should also prepare and share with the other, a statement of your assets and liabilities. This will ensure you both understand the financial union you are entering into.
2. Have an honest discussion
Now is the best time to discuss what your expectations are for each other in terms of finances. It is also the best time to reveal your strengths and weaknesses when it comes to spending and saving money. Then, ask yourselves where you want to be financially in a year. In five years? When you have kids or retire one day? Agree on these goals and get help if you can’t find the middle ground.
3. Manage your household budget together
Newlyweds have enough to adjust to without bickering about bills, so draw up a joint budget before you tie the knot. Decide upfront who will pay for costs like groceries, petrol, car payments, bond payments, insurance, entertainment etc. If one party feels that they are paying too much, this could cause animosity. So, discuss this upfront so that both of you agree and avoid future arguments or resentment.
It is also useful to set some money aside for unforeseen expenses like massive vehicle repair costs, or other emergencies.
Additionally, allocate a fixed amount of “me money” to each spouse. Having some discretionary money to spend can alleviate the hassles of micromanaging each other’s budgets. You could also set an amount, say R 1,000, and agree that all purchases above need to be talked about and agreed upon.
4. I want a separate bank account
Separate bank accounts are an essential part of financial planning. If your husband dies unexpectedly, or you decide to get divorced, you will need a separate bank account to collect life insurance payments or divorce settlements.
5. It’s important to have separate savings accounts, too
While a separate bank account is important, a separate savings account is essential too. Your husband might have different financial goals from you. He may be saving for a new car or golf clubs, but that doesn’t mean that you should neglect your goals. A separate savings account in your name will allow you to become more financially stable, and you can save for the things you want to buy for yourself without having to ask your man for money.
6. Partner with a financial adviser you can trust
Once you have a better understanding of your new financial situation within the marriage, find a financial adviser that will look after the financial wellbeing of both spouses. Make sure that the financial adviser is qualified and registered with the Financial Services Board (FSB). These trained professionals can help you to invest your money so that you can achieve your financial goals.
7. What will the newlyweds invest in?
Speak to your partner about his investment goals. He might want to avoid risky investments like penny shares and stick to long-term safe havens like gold or blue chip companies. You might not want to invest in a company that sells alcohol or cigarettes. So, it’s important to find out what investment vehicles will satisfy both your investment and other needs.
8. Get the right type of insurance cover for you and your family
Whether you rely on your husband’s income or he relies on yours, you need life and disability insurance. You may want to consider income protection and disability cover for both of you. If something unfortunate happens that destroys the family income, you will be able to get back on track granted that you were covered in the first place.
9. Start saving for your children’s education
Even though you might not have children yet, chances are that you may have children later on. Once this happens, you’ll find that educating those children is expensive. So speak to your future husband about having a separate savings account for your children’s education. This way, you know that you are planning ahead and to give your children the best opportunities in life.
10. Get a last will and testament drawn up for both of you
Never underestimate the power of a will. If you do not sign an ante nuptial contract, you are married in community of property. This means that all your husband’s assets become yours and vice versa. In the unfortunate event of a death, you don’t want family members staking claims to assets that are rightfully yours, so make sure that you and your husband draft a will, clearly highlight who the beneficiaries are and update this at least once every year.
Remember, to make your marriage a success takes hard work and commitment from both you and your husband. Your financial wellbeing is your responsibility, so take control of your financial future.