Long before you say “I do,” there are two words that could set your relationship on the right financial track: “Let’s budget.”
Talking about money may not always be fun, but it’s vital to the long-term health of your relationship. As Dr. James Philpot, associate professor and director of the financial planning program at Missouri State University, says, it doesn’t have to be a chore. “If a partner brings it up, it sends a strong signal that he or she is very serious about making this a lasting relationship,” he says. “And that could be very romantic.”
Keep in mind, says Philpot, that the point of financial planning is to keep a marriage strong. “These conversations lead to marital compromise,” he explains, “which is one of the first things a couple must learn to have a successful marriage.”
To kick-start the conversation, give these five questions a go.
How Big a Spender Are You?
Do you like to spend or save? Travel or invest? Buy or rent? Before getting married, make sure you know what kind of spending habits your partner may have, and identify common financial goals. “In a relationship, there’s always money flying around,” Philpot says. “Gifts are being bought, dates are being paid for, maybe vacations.” These are always good times to segue into a larger conversation about money, he says. Is your level of spending sustainable based on your income?
What Kind of Wedding Do We Want?
Of course, spending is especially important regarding the wedding ceremony, which may be one of the first major financial decisions of someone’s life. To ensure that it goes smoothly, decide early on what you have in mind for your big day. Think of the things that greatly influence cost (head count, location, music), talk about what’s important to each of you, and identify what fits within your budget.
Should We Have Joint Banking Accounts?
When it comes to relationship finances, some people are comfortable pooling resources, while others prefer to keep things separate. Still others maintain separate funds for personal use while contributing to a joint account for common expenses. There’s no right or wrong answer. But for couples who prefer to combine some or all of their finances, joint checking accounts are an essential tool—not just for buying groceries and paying the bills, but also to make sure that each partner feels an equal responsibility for their financial health.
Have We Insured Our Valuables?
Most people don’t start thinking about jewelry insurance until they purchase an engagement ring, but anyone with a modest collection of jewelry should consider it. Homeowners and renters insurance policies typically place limits on the amount that you can claim for any one item, and most engagement rings exceed that limit. Jewelry insurance helps you replace that precious keepsake in case of theft or loss.
Do We Need Life Insurance?
Broadly speaking, there are two types of life insurance: term life insurance, which is less expensive but doesn’t build up equity; and whole life insurance, where the built-up equity can be withdrawn later in life. The right one for you as a couple depends on whether you want the insurance as protection in case of tragedy or as a lifelong investment. In both cases, a policy is generally more affordable if you purchase it when you’re under 30.
Read More: Want to get married without breaking the bank? Check out these 5 Ways To Plan An Awesome Wedding On A Budget.