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One of the most important aspects of two people getting married, or, two people living together on one household, is the finances. Poor financial planning is one of the leading causes of marital strife as well as discontent between live-ins.
Though you and your partner will not agree on everything, you will need to discuss financial matters previous to tying the knot or agreeing to move in together. This will let each person know where they stand and how the money issues will be dealt with.
Some of the questions you and your spouse or partner will need to agree on are:
Will we keep our finances separate or combine them jointly?
If we combine our finances, how will we decide how to spend our money?
If we keep our finances separate, who will pay for what bills?
And, how much will each person pay towards the household bills?
How much can we afford to pay for rent or for a mortgage payment?
What bills do I have? What assets do I have?
What bills do you have? What assets do you have?
What are my spending habits like?
What are your spending habits like?
Should we sign a prenuptial agreement?
The answers to the above quesions will, of course, depend solely upon you and your spouse or partners' decisions.
Whether-or-not you and your spouse or partner decide to keep your finances separate or combine them together, you will need to plan and write down a monthly financial budget. This budget will be the basis for your household finances each and every month as you keep track of income as well as outgoing money.
Your income will include wages, bonuses, rent income, investment income, child support, etc. Your expenses will include the rent or mortgage payment,utilities, groceries, clothing, medical insurance, medical expenses, life insurance, homeowner or renter's insurance, automobile insurance, automobile expenses, entertainment expenses, vacation savings, 401K or other retirement fund contributions, savings account, possibly child support payments, and miscellaneous expenses. The miscellaneous expenses will include incidentals such as lunches, newspapers, and the sort.
Keep in mind that even though retirement is probably a long ways off yet, you and your spouse or partner will need to start as early as possible investing for your future together. If you need to choose your own investment firm, make sure you do some research first and find a reputable, well-established company that will properly handle your retirement account for you.
Once you have figured out your present financial status, you and your spouse or live-in partner can then plan for future together. Future goals might include buying a house if you currently rent, or maybe even buying a larger house even if you already own one.
Also, now that you have a household budget established, the important thing to do is to practice self-control and stick to it. Don't get yourself in the trap of using credit cards without paying off the entire balance each and every month before an interest charge is tacked on the balance. And, don't get into the trap of paying out more every month that you and your spouse or partner earn together.
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