Maybe you’re planning a wedding or maybe you and your partner are still in the newlywed stage. In addition to combining your lives, you have the fun task of combining your finances and get to create a newlywed budget. How can you discuss money before marriage to make for an easy financial transition? What do you do when one of you is entering the marriage with debt? What do you do if neither of you knows how to manage money?
How can you discuss money before marriage?
Money is a very private, personal topic, but it’s also one that’s extremely important. You definitely don’t want to have the money conversation too early in your relationship, but as things get more serious, it’s important to find out how your partner feels about money and overall what their financial situation looks like. Honesty is extremely important in marriage even if you’ve made some bad financial choices. The purpose of this conversation isn’t to judge each other, it’s to figure out how you can work together as a team to reach your shared financial goals.
Start by explaining to your partner why you think this conversation is important. For example, “I’d like to talk about money because I want to make sure that once we’re married we are working towards the same goals. I currently have $1,000 of credit card debt, a car loan with $5,000 left, and $30,000 of student loans. I am working to pay off this debt, but it will not be fully paid off before the wedding. I’d like to hear about your situation and if you’re on board to focus together on paying off debt when we first get married. Within our first 5 years of marriage, I’d also like one of our financial goals be to afford a vacation without paying credit card interest on it. What do you think?”
What do you do when one of you is entering the marriage with debt?
If you both enter the marriage with some form of debt you can work to dig out together. When one of you is entering the marriage with debt and the other is not, it can often create added stress. The person entering without debt may feel thrown into this situation and unsure how to make a plan to get out of the debt. While the person with debt may feel like they are holding the relationship back while cleaning up old choices. No matter which person you are, it’s important to remember that you’re in this together and that by working together you’ll more quickly be able to create the life you want.
First, it’s important to talk about how you got the debt since it’s difficult to change habits without acknowledging the situation that made you choose debt. For example, student loan debt is different than credit card debt from overspending. Then, once you identify the challenges, you can make a plan to avoid them and avoid getting deeper in debt. No matter what your debt situation when you get married, you need to work together to make financial choices together as a team.
When you talk about your debt, you can acknowledge that you wish you had made different choices, but you need to give yourself some grace and not continue beating yourself up. ‘Past you’ did the best they could. Current and future you is smarter and more prepared and can make different decisions now. Acknowledge your past, but focus on changing the situation moving forward. No matter where you are starting, the choices you make today will create a better tomorrow for future you.
What do you do if neither of you knows how to manage money?
Now is a great time to learn. There are a lot of great books that can help you learn the basics of how to take control of your money. The most important thing that you can do is to create a newlywed budget. That way, you can see how much money you have saved, how much money you earn, and how much you spend. When you see exactly what’s happening with your money today, you can decide if there any changes you want to make to achieve your financial goals. Want a free budget template? Subscribe for access to the Big Picture Budget free resource library.
Do you feel like you’re in over your head? Are you and your partner overwhelmed and not sure where to start? Consider my Financial Makeover Course or a virtual financial coaching session. Money doesn’t have to cause you stress. Admitting you need help, guidance, and accountability is a sign of strength and will help you reach your financial goals more quickly.
When you enter into a marriage there are lots of things on your mind and creating a newlywed budget might not be one of them. When you create a newlywed budget, you’re creating a roadmap to set yourselves up to succeed. By taking control of your money you can take control of your life. No matter whether your financial goal is working to pay off debt, saving for a house, or trying to afford your dream vacation, a budget is the tool that will help you get there.
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