Posted on 10/11/2016
So you’ve got your dress, booked the venue, ordered the cake, and invited the guests, but the one thing on your checklist you haven’t got to is the most important – reviewing your assets.
It might sound dull in comparison to choosing your bomboniere or band, but when two people are coming together for a lifetime of wedded bliss, the most important thing to get right before you tie the knot isn’t the flowers, it’s your finances.
Here’s our checklist for making sure your finances are in order before you walk down the aisle.
Paying for the big day
Whether your family has offered to chip in, or you’re paying for it entirely by yourselves, a wedding is a major expense and can be the cause of many financial frustrations before you even say “I do”.
According to the ASIC’s Money Smart website, the average Australian wedding now costs over $36,000 – so if you want to have your wedding cake and eat it too, you’re up for some hefty credit card debt if you don’t rein in your expectations.
Our advice? Have a beach wedding, picnic or backyard barbecue wedding and put the rest of the money you’ve saved for the big day into the bank!
If that’s not an option, and the credit card is already hot from wedding related expenses, sit down with your partner and draw up a payment plan that will allow you to live comfortably once married, while paying off your debt quickly before it incurs too much interest.
Mortgage is the new marriage
With many Australians now living together or even buying a home together before getting married, you might think that you already have your finances in order, but it’s still important to do some financial planning, to establish how a marriage will impact your investments.
Everyone has a different perspective on what a “marriage” means when it comes to finances, so communication is essential when discussing the assets each partner is bringing to the table.
Some may be coming in to the marriage with their own property portfolios, family funds, business debts, child support or other expenses from previous relationships, so agreeing on who owns what, and how the money coming in will be divided up amongst you, and your joint (or separate) assets or debts, will save a whole lot of headaches in the future.
Don’t forget there’s no right or wrong way to split your finances in a marriage. The way your parents or friends do it may be completely different to the way you want to approach it – just be mindful that whatever you decide will serve and protect both of you from any unforeseen circumstances.
Draw up a Will
Speaking of unforeseen circumstances, it may not be pleasant, but planning for death and divorce is just plain practical when it comes to entering into a marriage.
The best way to ensure each of your financial wishes are taken care of is to approach it legally, which is why drawing up a Will is an essential step for any newlyweds.
Find a good lawyer to avoid any pitfalls and discuss openly all of the circumstances that might impact your decisions.
Lawyers can prepare Wills to cover any scenarios that may eventuate throughout a marriage – this may include family assets, children, spousal death, divorce, or charitable donations.
It might be an uncomfortable conversation, but if you do it right, you shouldn’t have to do it again.
Dreams, schemes and plans
Financial planning doesn’t have to be all doom and gloom, the fun part of reviewing your finances is discussing your financial goals.
Sit down with your partner and discuss your dreams, aspirations, and where you see yourselves in 50 years time. How many kids you want to have, what kind of education would you like for them, how many family holidays would you like to take each year and what personal or professional goals you both have.
This will give you both a general understanding of the kinds of things you’ll want to save for as you live out your lives together, and is a great starting point for a consolidated family budget.
While a budget might sound restrictive, when you’re thinking about your entire lives, it’s actually incredibly empowering to start planning early.
Starting a savings plan together will allow you to build your wealth with common goals in mind, setting you up for a lifetime of financial stability, and ultimately financial freedom!