Money can't buy happiness, right? In the UK, disagreements about money have become the number one reason for couples getting divorced. Once newlyweds go from richer to poorer, it appears maintaining that sense of marital bliss becomes a lot more difficult. If you have just married, it's probably a good idea to discuss the following money management scenarios with your new spouse as soon as possible.
This is the first financial decision that most married couples face. You can opt to put your money into joint accounts or keep things separate, and both approaches have their pros and cons.
For instance, joint accounts simplify money management and may help to breed trust within the relationship. On the other hand, individual accounts help maintain a sense of independence that is preferable to some people.
If a mortgage and children become factors, the vast majority of married couples find merging finances just makes things easier. However, before that time, there's no need to rush to a decision unless you and your spouse are 100% comfortable with the idea.
Debt can be damaging when one person has to shoulder the burden. But once you are married, your spouse's debt can become yours, which can end up doubling the problem. If you decide to keep your finances separate, from a legal standpoint, you won't become liable for credit card debt and loans taken out in your spouse's name. Even so, your partner's credit rating will have an effect on any joint credit you might want to secure in the future.
All things considered then, it's best to try and start your life together on a firm financial footing. So, if possible, now is the time to work together with your partner to eradicate debt at the same time as creating a plan not to rack it back up again.
Are you planning to begin married life by starting a family or buying a new home? Then setting a budget will help you generate the funds required to pay for your life goals together.
A big part of budgeting is assessing all your expenditures to see what can be cut and put towards your financial objectives. Start by reviewing your individual spending patterns over the last few months, and identifying whether there are any areas you can both reduce spending.
After that, set a limit on how much you can afford to spend on food and going out, and how much you need to ring-fence for bills. To ensure that you don't get into debt, it is also important that you allocate funds for unexpected expenses - such as car and household repairs.
Finances often fluctuate according to your situation and income changes. For this reason, you and your partner might find that setting a budget needs a flexible approach. So if you need to make budgetary adjustments, especially within the first few months, it shouldn't be a cause for panic.
Research suggests that you will need a private savings pot of £121,000 on top of your state pension to live a 'comfortable' life in your twilight years. If you haven't already, it's a good idea to start building firm financial foundations as soon as possible.
Investing into a pension or tax-efficient ISA are both viable options for building up sizeable savings. However, to maximise their investment potential, many married couples seek the help of a broker or financial planner to ensure they enjoy the best possible standard of living later in life.
Even if you are starting married life debt-free and on course to enjoy a wonderful career, you might still find yourself woefully underprepared for an emergency. At Compare Cover, our speciality is life cover and we are dedicated to protecting your world for less.
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