You’re getting married! What financial should you be discussing?
Getting married is a very exciting time of life and it is important to ensure that you are on the same page with your new partner when it comes to finances. While it’s not the most stimulating topic amongst all the wedding plans, it is smart to discuss these issues with your partner well before the wedding and do some financial planning. Decisions that you and your future spouse make about how to handle money will have a long-term effect for you, not just as individuals, but as a couple whether you chose to combine your finances or keep certain things separate. The choices you make with your finances can not only have financial implications but also emotional and sometimes legal ones.
The first important step is full disclosure. Getting married has legal ramifications and you need to know the risks that you may be taking by getting married. This includes disclosing all assets, liabilities, and other financial responsibilities that you have (possibly to family, previous marriage etc.). Getting married means that what is yours becomes ours, whether it be property, savings, superannuation, or debt. Full disclosure also means disclosing your credit history as a poor credit history for one partner may impact future events, for example, the potential to borrow for your new home. It’s important during this stage is talk about your spending habits, how you manage debts and other financial responsibilities.
Once full disclosure is out of way, starting to make plans is a little easier. Some things to consider are:
- Do we keep our finances separate or together?
- How do we best manage the household budget? Are there expenses such as health insurance that can be joined to save some money.
- Who pays for what? This is especially important when one earns more than the other.
- What are financial goals as a couple for the next 3-5 years? Houses, holidays, kids, etc
- How do you prioritise those goals as a couple?
- Depending on who bring what to the table, is a binding financial agreement worth considering?
Weddings can be expensive, so this will be your first financial test. It’s good to talk to your partner about how much you can realistically afford to spend on your wedding before getting caught up in the glitz and glamour. You don’t want to start out married life with huge debt. Take some time to work out a budget.
You also need to understand any legal implications of marriage:
- Getting married makes your Will invalid – this will need to be updated.
- Update your insurance policies to reflect your new status- particularly life insurance.
- Update your beneficiary details on your superannuation fund.
- Update the ATO and other financial institutions such as banks and insurance companies with your new name (if changing).
Four key takeaways:
- Full disclosure of assets, liabilities, and credit history
- Budgeting can assist couples during the early stages until you learn how to be financially compatible. (moneysmart.gov.au has a great budgeting tool!)
- Joint financial goals ensures that you are both heading in the same direction.
- Understand the legal implications of getting married.
