Marriage | blog.firstffcu.com

Bursting the love bubble by sitting down and having a serious talk about finances is never fun, but open communication about money is a good idea in any relationship.

Since it’s wedding season, those thinking of tying the knot should have a serious discussion about money at some point, preferably before you move in together or actually get married. Even if there are no plans to combine finances completely, it’s still good to clear the air and see if you and your future spouse are on the same page.

Here are five things to talk about before moving forward:

1. Debt

One of the biggest things you need to talk about is debt. Get it out there. Even if you won’t be sharing finances, one person’s debt can have a profound impact on household finances. If you want to buy a home together or if you want to do other things, someone’s obligations can hold you back as a couple.

Have an honest talk about your debt levels, and see if you can make a plan to pay down the debt. Even if you don’t share finances, the partner without the debt is going to have to be supportive until the debt is paid off.

2. Credit

Credit goes along with debt, but it isn’t exactly the same thing. While it’s not vital that your partner have a perfect credit score, it is a good idea to see where you both stand, and be honest about the situation.

At some point, if you decide to get a joint loan together (for a car, wedding, or a home), both of your credit scores will matter. Talk about it so you know what you need to do together. If one of you has a poor score, you might have to wait a little longer before you accomplish some of your loan goals.

3. Money Philosophy

This is a bigger deal than you might think. It’s a good idea to know whether or not you have the same money values before you take that next step. Spenders and savers need to be able to come up with a plan to compromise. If you like spending your money on lots of books, and your partner prefers movies, you might need to come up with a plan to make sure you both get what you want at least some of the time.

4. How to Handle Kids and Money

If you think you’ll have kids together (and that’s another conversation you need to have before taking things to the next level), you need to talk about how you’ll handle kids and money.

Do you want to save up for college for them? How will you handle allowance? Extracurricular activities?

These are big questions you need to tackle together so you are on the same page. It’s vital to know early on so that you aren’t unpleasantly surprised later.

5. Retirement

Chances are, you both want to save for retirement. But do you have a shared vision for what that looks like? Before you commit to a long-term, life partner relationship, make sure you talk about how you want to handle retirement. It can be tough if one of you expects to sit at home most of the time, and maybe play golf a couple times a week, while the other wants to sell the house and everything in it to travel the world.

In the end, you need to make sure that everyone is on the same page so that all your money goals are being reached together. Take the time to have a discussion now, so there are fewer surprises later.

Article Source: Miranda Marquit for moneyning.com

When you say “yes” to tying the knot, you’re doing more than joining hearts and lives, you’re also joining finances. Gulp. For better or worse, if you don’t communicate openly about money matters and work as a team, your marriage can end up in hot water.

Whether you’re married or about to walk down the aisle, here are five money conversations you should have with your spouse:

1. Create your personal financial blueprint: Few newlyweds are fortunate enough to have significant assets to invest and plan for. But with a relatively blank financial slate, two people can chart their vision; make concrete goals, and together gain knowledge to create financial security going forward.

Initiate the discussion by throwing an acquaintance or neighbor under the proverbial bus: “Mark and Pam sure have beautiful cars/clothes/jewelry, etc. Kind of makes me think that they will be forced to work forever to keep up with the interest payments alone!” Newlyweds should seek to educate themselves on financial matters by attending area adult education courses (preferably free ones) and reading financial books (borrowed from the library). Saving and investing that first $10,000 will provide a calm far greater than any 10-day cruise ever could.

2. Before the stork arrives, create a will: A will is needed to name a guardian of your minor child. It is often this difficult decision that causes people to put off creating a will. Without a will, the court will have the final say as to who raises your child in the event of your death.

Initiate the discussion by asking your spouse for their opinion on choosing a guardian. Try not to react negatively if you disagree with his response: “Your mother? That is a lovely thought – she certainly did a fine job with you (psst…go for bonus points). Do you think though, that it might not be an imposition on her because of her health issues, etc.” If you hit an impasse, you can also suggest co-guardians.

3. How should we grow our savings?: Ideally, this endeavor becomes a hobby for you as well as a goal-oriented pursuit. Investigate the retirement planning options that your employer may offer. Don’t have that option? Sit with a knowledgeable financial professional who will discuss various investment class options with you.

The Investment and Retirement Center located at First Financial can do just that! If you would like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your retirement and investment goals, contact them at 732.312.1500.*

Initiate the discussion by saying something like, “We work hard for our money and I’d like to brainstorm with you and a financial advisor as to how we can make the most of it.”

4. Long term care planning: A slower than expected economic recovery coupled with increased life expectancies and ever-increasing costs of medical care has made relying on government funded long term care resources unrealistic.

Initiate the discussion by encouraging your spouse to sit down with a long term care insurance professional. What you are looking for here is a maximum daily benefit that coincides with the cost of care in your area. Don’t be seduced by the 5 percent inflation protection, because the actual cost of care increases approximately 12 percent per year.

5. Insure your estate planning: You’ve done your will, powers of attorney, and health care advance directives, but how can you be sure that your surviving spouse won’t remarry and potentially lose those assets in a subsequent divorce?

Initiate this conversation by pointing to a real life example, if possible: “Isn’t it tragic that Marvin (widower friend) disinherited his adult children in favor of his home care companion? Yes, dear, I know that you would never do this, but what if either one of us developed a dementia-related illness down the road? All bets are off at that point. Let’s at least sit down with an attorney and see what the options are (i.e. post-nuptial agreement or trust) before we make any decisions.”

Working together to discuss and come up with a plan for these important money related topics that is right for both of you, will be the key to a happy “financially communicative” marriage.

*Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are: