Getting married is one of the biggest moments of your life, and often it leads to a couple other major decisions, too–like deciding to buy a house, or deciding to have kids. This Madison credit union has some great advice for preparing financially.
Before you decide to get married, you should be more financially prepared than ever. At the very least, you should have a great plan in place. And, of course, it all starts with one of the most important pieces – the emergency fund.
Expand Your Emergency Fund At A Madison Credit Union
We cover the importance of an emergency savings accounts in just about every piece we write. You absolutely NEED one of these to be on solid financial ground, as it’s what’s going to keep you stable when disaster strikes.
Before you get married, you’re going to want to make sure that both your and your partner’s Madison credit union emergency funds have the recommended three-to-six months’ worth of savings in them. If you want to build it up even more, just in case, there’s never anything wrong with that. A not-so-secret secret for you: it’s going to be way harder to save with more responsibilities on your plate – so start now.
Build A Budget While Discussing Finances
Before you decide to marry, you’ll want to be familiar with one another’s current financial situation as well as financial habits and challenges. You should know how you will divide up living expenses, groceries, gas, etc.
3 Popular Methods for Sharing Expenses
- Percentage of income – add you and your partner’s gross incomes together and divide each person’s income by that total. Example: Mary’s gross income is $45,000 and Tom’s is $35,000. Together they make $80,000. Divide $45,000 by $80,000 to get .56 or 56%. This would be Mary’s portion of all shared bills. Tom will contribute the remaining 44%.
- 50/50 – split each shared bill or expense in half. Easy.
- Taking on separate payments – each person decides which expenses they will be wholly responsible for and pay those on their own.
Open and honest communication is important when talking about money. Does your significant other have student debt? Monthly car loans? Make more or less income than you? Sharing things like your long- and short-term savings goals and your spending habits is super important, too.
Many people have a lot of, sometimes hidden, emotions around money. Psychology Today says: “It’s hard to be dispassionate about money, but honestly, it’s really the best way to talk about it. You have to look at it from a practical standpoint.” The best thing is to speak freely (without emotion, if possible) so each person makes sure their needs are met and the situation feels fair or equitable. When individual incomes change, talk again. Or, even better, talk about finances monthly.
If the two of you have lived together before marriage, you’re most likely familiar with one another’s financial situation, and you probably won’t have to adjust your budget by much (minus the saving-for-a-wedding part). If you two haven’t lived together before the marriage, it’s going to take a little bit of extra financial finagling, as you’ll have a lot of budgeting to figure out.
Start A Marriage Fund
Good spending habits will help you start your marriage off on the right foot. And there are few better ways to be financially well off than by not having debt. So, a good goal to make is to not get married until you can afford it.
In 2019, Wisconsin couples spend approximately $24,000 on their wedding, and that doesn’t include the potential cost of a honeymoon. Sticking to a wedding budget is notoriously tough, as there can be a lot of hidden costs.
You Can Do It!
Though it can seem nearly impossible to figure out how much to spend on your wedding, you need to get as close as possible well in advance of the date. After you’ve got a good, rough estimate take your total, and divide it by the number of weeks or months until the wedding. Put that amount into your
Decisions, Decisions, Decisions
If you have a traditional wedding the costs are going to stack up: You’ve got dresses, tuxedos, and all the preparations the parties have to do beforehand, such as hair and makeup; you’ll most likely need a DJ or band, a photographer and/or videographer, and you’ll need floral arrangements and other decorations, save-the-dates and RSVPs–as well as thank-you cards; you’ll further need to book a venue and cover the food and beverages for the guests beverages.
Of course, simply because the average couple spends so much on their wedding doesn’t mean YOU have to. You and your future spouse can skip the wedding and go straight to being married! In this scenario, all you would need to pay for is the wedding license–which is 70 dollars in Wisconsin–and someone to officiate. From there, it’s up to you: You will probably want to buy rings, and maybe have dinner or a party at your place in the near future for friends and family.
Do It Your Way
When it comes to your wedding, it’s ALL about you and your spouse. You can spend however little or much you’d like. But, it’s a good rule of thumb to not go into debt for your wedding. You don’t want to spend the first few months or years of your marriage paying off one special night. And remember: A financially successful marriage is, indeed, a part of a life-long happy union.
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