Money talks with a partner can get awkward quickly — especially in the midst of a blissful engagement. Most couples avoid discussing money with each other, but financial planning before marriage might actually help you pave the way toward a healthy financial future together. And we’ll toast to that.
Here are four important financial questions to ask before getting married.
How much debt do you currently have?
Marrying someone with debt can be challenging, and one of the most daunting financial obstacles millennials face is student loan debt. Understanding each other’s debt and income levels can help you budget as a team. What kind of home can you afford? Can you get approved for a conventional mortgage? If one of you has a lot of debt to pay off, use this calculator to determine how much longer you will need to pay it off. Decluttering your finances will also help you both feel organized and clear-headed as you talk through your current financial obligations.
Are you contributing to a 401(k) or other retirement plan?
Young adults in their 20s and 30s today are estimated to need between $1.8 million and $2.5 million in retirement just to maintain their current standard of living. As you start a new chapter together, keep in mind that the sooner you begin to save, the more likely you’ll be able to live comfortably in your retirement years, as well as help with the education of your children. Retirement planning is also a necessary part of getting financially fit in four years, an optimum timeline for engaged couples’ financial future. If you’re already participating in a 401(k), review and possibly update your retirement plan beneficiaries after the wedding.
Are you using your company’s 401(k) match?
If the answer is no, teach your intended the benefits of participating in a match program. An employer match can help you get ahead on your retirement savings. Many employers offer some type of matching contribution as part of their retirement plan, usually up to a percentage of your contributions. In other words: Free. Money.
Do you have a life insurance policy?
Something important, albeit uncomfortable, to think about before “I do”: the loss of your spouse. An unexpected death can mean hardship for the surviving spouse, unless you’re prepared. Life insurance is especially vital when you’re gone and your spouse needs help with things like the mortgage, car payments, child care, college expenses and debt. With term or permanent life insurance, you can establish a foundation for your growing family. Still not convinced? Check out more unexpected benefits to having a life insurance policy.
FBFS can help you make sense of your options for retirement, college funding, estate planning, and more. Connect with an agent today and start investing in a secure financial future with your soon-to-be spouse.