Financial planning as a couple is essential for executing shared goals and achieving financial stability. It requires vulnerability from both parties, open communication and critical decision making. The key highlights of financial planning as a couple include setting financial goals, budgeting, managing debt, planning for major life events, investing, preparing for retirement, developing a plan for the unexpected and being open with one another. Understanding these topics can help a couple have successful financial health.

Setting Financial Goals

One of the first steps in financial planning is to make sure that both partners are on the same page. This includes short-term and long-term goals. Short term goals may include saving for a vacation or purchasing a car, while long-term goals could include buying a home, funding college for children and future retirement. Being like-minded ensures that the couple is working towards a common goal that is best for the future and their family, as well as peace of mind.

Creating a Budget

A well thought out and planned budget is crucial in managing finances. Living within your means and tracking income and expenses is an important part of this. Allocating funds to different buckets for savings is also necessary.

Managing Debt Wisely

When entering into marriage, it is critical to understand what existing debts both partners have. This includes—but is not limited to—mortgages, student loans and credit cards. Deciding how to handle these will be a key step going into the marriage, such as if one person will sell their house. Working to create a debt repayment strategy that will minimize interest payments will be helpful. Consolidating and refinancing can be useful to investigate as well.

Planning for Major Life Events

Getting married is a wonderful time to reevaluate your financial plans. Other life events down the road could warrant this as well, including buying a home, having children or a career change. Couples should anticipate these life changes happening and be prepared to adjust their financial plans accordingly. These milestones should be an exciting time, and a couple would not want a lack of financial planning and saving to take away from these moments and cause financial strain.

Investing for the Future

Investing is an important part of a couple’s financial future. A couple should consider investing in several types of accounts to diversify. When more than one person is making the decisions, it is important to understand each other’s risk tolerance and find a middle ground. Working with a financial advisor can help to be informed of the options and help work through these things.

Retirement Planning

Couples should start early and save often for retirement. Even for young couples it is not too early to start thinking about retirement. Couples should consider what options they have available to them through their employer so they can take advantage of employer matching programs. Regularly reviewing these can help to ensure a safe and comfortable retirement.

Building an Emergency Fund

An emergency fund is necessary as life does not always go as planned. Losing a job, having home repairs or medical expenses can all be unexpected. Having an emergency fund allows a couple to take care of these things without having to have the extra financial burden. This allows them to fund the expenses without going into debt or another avenue. Ideally couples should have three to six months’ worth of living expenses saved in case of an emergency.

Open Communication and Transparency

Financial planning is most effective when both parties are vulnerable and open about their financial situation going into the marriage. Regularly reviewing the situation and discussing finances can help couples to stay on track and meet goals. Keeping on the same page and avoiding misunderstandings is crucial in financial planning.

By keeping in mind these key elements, couples can work together to strengthen their finances and work towards a prosperous future together. Always remember that each couple is different, and it may take some time to hit your stride. Additionally, it’s good to establish rules on who is entitled to whose income and who is responsible for debts.

The professionals at Busey Wealth Management are here to help you plan for the future no matter your life stage. To learn more about our services or find an advisor near you, visit busey.com/wealth-management.

This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.