business 6 Must-Have Money Conversations Before Marriage September 06, 2022 Before you tie the knot, it is crucial to take the time to understand your partner’s financial preferences and habits. Here are several key items to discuss before walking down the aisle. Are you recently engaged? Congratulations! In the midst of all the excitement, don’t forget to talk finances with your future spouse. Understanding each other’s financial and life goals can be stressful. We have some tips that can help aid in those important conversations before marriage. 6 Key Things to Discuss Marriage is not only a promise to your significant other, but a legal one. It may not be the most exciting topic of discussion but be sure to fully communicate your financial standings to one another. This ensures that both sides are aware of any possible risks. The decisions that come out of these conversations are long term and can have negative consequences if not strategically planned. Aligning your joint financial goals- To avoid conflict and maintain a good financial standing, plan a budget that is approved by you and your partner. Be mindful of each other’s current assets and liabilities. How much debt are you bringing to the marriage?... What about your spouse? If you are coming into the marriage with a less than average credit rating, make sure your spouse is aware. Consider how you might offset your (or your spouse’s) debts and liabilities moving forward. Are there any top priorities or long-term goals you may want to achieve? Is there talk to have children in the future? Will a joint account be created, or will you decide to keep things separate? Discussing each other’s beliefs and attitudes on saving and spending is crucial before making these decisions. Planning the Big Day- You want to make sure your wedding day is memorable and special, but within your means. If the finances fall on you and your fiancé, make sure both ends can afford it even if sticking to a budget. While the wedding should align with your vision, is the cost interfering with reaching a financial or life goal? Remember to think reasonably! Deciding who will be in charge of finances- How will bills be paid? As many of your expenses become shared expenses, there is a decrease in housing costs, insurance, utilities, and other necessities. However, will there be a delegated person who will be making these weekly or monthly payments? Will one spouse be responsible for certain expenses each month? All accounts should be accessible in case of an emergency or unforeseen circumstances. It helps to join together and create an annual budget, a plan for possible lay-offs, and a plan for your eventual retirements.Benefit Plans- You may need to review or update your benefit plans. Do you participate in an employer sponsored retirement plan? You might consider getting rid of duplicate health care or life insurance coverage, as well as updating your insurance policies and retirement plans to reflect your new beneficiary. To live comfortably in retirement, you need to save enough money to generate the income you will need in retirement..Consider the legality of marriage- In the first few years, unfortunate instances including death of a spouse or divorce are never expected, but do happen. Remember, state law has the power in determining ownership of assets within a marriage, and the state where you were married in has specific laws, so it will be beneficial to familiarize yourself with them. If you move to another state, you should consult an attorney to make sure that you do not need to make any changes to the ownership of your assets for estate planning purposes. If one spouse is bringing significant assets to the marriage, you may want to consider a prenuptial agreement to spell out how assets are divided in the unfortunate case of a divorce. In addition, you should consult with an attorney to prepare an estate plan, i.e. will, trusts, etc. An estate plan comes into play upon the death of one of the spouses.Having children- The decision to have children is a big one, and you want to make sure that you and your fiancé are on the same page on this subject prior to the marriage. Having children is also a significant financial consideration. Even when you have great health insurance, having a baby is expensive. Consider the financial impact of maternity leave, and what you’ll be spending on out-of-pocket medical costs. Typically, you have 30 days from your child’s birth date to add them to an existing health insurance policy. Planning for their education sooner rather than later will also be beneficial. What are your thoughts on private versus public education, or college? It is never too early to take time to budget for things beyond your current affairs. Preparing a college fund when your children are young will save you stress when it comes time to actually send them off. What It’s All About While marriage should focus on the love and happiness shared between two individuals, it is important to remember that it is a legal and financial commitment with someone. Understanding both sides and having these conversations before the big day will make future planning easier and reaching personal or joint goals more attainable. Do you find yourself struggling with future planning? Contact KLR Wealth Management, LLC. Investment Advisory Services offered Through KLR Investment Advisors LLC Investment Advisor Representative Insurance Services offered through KLR Insurance Advisors, LLC 951 North Main St Providence RI 02904