You are crushing it in your career and have found love. Mazel Tov! You and your partner have decided to make it official and tie the knot. Now what? I’m not going to give you any wedding planning tips because my wife ran that show. However, I can share some advice on financial topics to address with your soon-to-be spouse.
Financial Planning Together
Now that you are entering into a partnership with your future spouse, you should go back to those financial planning basics as a couple. Hopefully you have done some of these things on your own, but now it’s time to do it together. (For more, see: Retirement Planning the Millennial Way.)
- Discover what your shared financial goals are and prioritize them. There will probably be some major life events that will happen in the five years after you get married. Discuss how to balance what you want with how you plan to get there in terms of savings. Money can be a big point of conflict in marriages so don’t avoid having this conversation just because it might be a little uncomfortable. Be honest with your partner about what you want in life.
- Disclose your debts, assets and financial obligations. As a couple, create a net-worth statement so you have a clear picture of your overall financial situation. Many Millennials have student loan debt or poor credit. Understand how this impacts your financial situation and know that it may mean that you have to go back to your joint goals and reassess.
- Discuss whether you want to merge finances. Some couples prefer to have joint accounts for paying bills such as rent, mortgage or groceries and separate accounts for other purchases. Some couples prefer to share responsibility for all expenses. Either way works, but make sure to decide what is right for you both.
- Create a budget. For many Millennials, money is going to be tight at the beginning of your marriage because you are still new in your careers. By having a budget, you may avoid an unnecessary argument with your spouse about whether or not you could afford to buy that new fancy pair of shoes. It also doesn’t hurt to set aside time each month to talk about your finances as a couple. Understand how you are doing with your budget and monitor your progress towards goals.
One additional piece that may seem like a drag is estate planning. It won’t be fun to talk about these things but you are preparing to sign that marriage certificate and make things legal. Don’t wait for the worst to happen to deal with it. It is better to prepare now. Here is a quick rundown of what you should have in your “Estate Planning Starter Kit.” (For more, see: Top 5 Most Common Personal Finance Goals for Millennials.)
- Last Will and Testament - This document spells out who receives your possessions and assets when you die. It also states other important information such as who you want to place in charge of administering your estate and who you want the guardian(s) of any minor children to be, should you have any.
- Durable Power of Attorney - You should have a written durable power of attorney letter, which identifies someone who can make financial decisions for you if you're incapacitated and who can do things like pay your bills and manage your assets.
- Healthcare Proxy - This document permits a specified person to make medical decisions on your behalf, allowing them the ability to authorize medical procedures and treatments.
- Living Will - A living will outlines your wishes if you are incapacitated, death is imminent, or you are in a persistent vegetative state.
Due to their very nature, these areas of estate planning can be as serious as they are emotional. However, it is important to recognize that should the worst arise, the emotional pay is typically far worse than spending a few hours and dollars with a reputable estate planning attorney.
My last recommendation is to stay away from online legal service websites. While I agree that technology can make our lives easier in some situations, when it comes to serious matters, I recommend meeting with a local, legal professional in person. Working one-on-one with someone that you trust will help you sleep better at night. (For more from this author, see: How and Why Millennials Should Seek Career Mentors.)