Wedding season is upon us, and this year we’re more grateful than ever to be able to celebrate these joyous occasions in person with friends and loved ones. New beginnings like these are also a great opportunity to work with your significant other to optimize your finances and create a plan for the future. Below are five tips to assist you in this process.
Be open and honest with your partner about your current financial situation and try to reserve any judgements on theirs. A great starting point is to prepare a balance sheet that shows your new combined assets and liabilities.
2. Set Your Goals
Discuss your values and visions for the future, using them to determine your goals. You can then decide which goals are “needs” and which ones are “wants,” which will help you prioritize accordingly and determine appropriate timelines for each of them.
3. Create A Budget
Once you’ve established your goals, you can look at your joint income and expenses in order to create a budget. A small portion can be allocated to each partner for more individualized activities (such as golfing, shopping, etc.), while the majority of the budget should be looked at holistically. Partners who are able to hold each other accountable often have the most success with budgeting.
4. Plan For Emergencies
While it may be easier to think about the bright and enjoyable future, it’s still important to plan for the unexpected. An emergency cash reserve should be created as a “rainy day fund” and should have enough cash to cover expenses for at least six months. Also, the beneficiaries of retirement accounts (such as a 401ks or IRAs) and titling of individual and joint accounts should be considered. There are numerous ways you can title joint accounts, each of which has its own pros and cons, so it’s important to research to find the most suitable titling for you. Insurance should be another consideration, and a trusted agent can help determine the correct amount of coverage you need.
5. Ongoing Management
While the above are great starting points, financial plans need to be updated as life changes. Whether it’s changing jobs, deciding to have children, or purchasing a home, your plan should be revised as your current situation and goals evolve. You can establish a predetermined time each year to review the plan and make any changes necessary, also taking care to update it as big life events unfold. Getting married is an exciting time and can serve as a great opportunity to set the groundwork for your financial goals. Taking the time now to plan ahead can minimize stress and will have you thanking your future self. If you reach a point where you simply can’t allocate enough time to handling your finances, or if your situation becomes too complicated to understand, you can always reach out to a trusted Financial Advisor for assistance!
Wealthspire Advisors LLC is a registered investment adviser and subsidiary company of NFP Corp.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, Certified Financial Planner™, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
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