If you are married or in a civil partnership, then it’s worth considering how best to manage your money in a marriage if you haven’t already done so. According to wealth managers Seven Investment Management, there are four key areas that you should consider.
1. Talk about money
Probably the most beneficial thing you can do is to have a conversation with your partner about your finances.
People’s attitudes to money vary considerably. A frank and honest conversation about money will give you both an idea about each other’s financial habits. This should cover a wide range of subjects, but you can start by finding out your partners opinions on risk, debt and savings.
It would also be beneficial to discuss your hopes and aspirations. If you are planning a family or already have children, you may want to discuss the possibility of private education, for example. If your parents are still alive, looking after elderly relatives may be a topic that is also worth talking about.
[top_pitch]
2. Get educated, get organised
A conversation about money will help to pinpoint each other’s strengths and weaknesses when it comes to managing money in a marriage. But it doesn’t mean that one member of the partnership should take sole responsibility.
The next important step for you and your partner is to get educated about how to manage your personal finances, and put this into action by getting organised.
Start with getting the basics right. Make sure you have an emergency fund for anything unexpected and keep this safe. You should both have an idea of how your everyday expenses are paid. Create a filing system that you both have access to. This will prevent any problems if something happens to either of you.
Make sure your finances align with your future plans. If you are planning to buy your own home with a mortgage, you will need a good credit score. Your plans could be compromised if you have unmanageable levels of debt, so it is worth taking steps to get existing debts under control.
3. Review your cover
It’s very easy to avoid talking about this issue. No one wants to think about what will happen when they die. However, making financial arrangements before the inevitable happens is an important aspect of managing money in a marriage.
If you have a mortgage, chances are you will need to apply for life cover anyway. It’s worth making sure you have adequate life cover to take care of additional expenses, such as funeral costs.
It’s also important to note that death isn’t the only event that could prevent you from contributing financially. So it might also be worth considering income protection as well.
[middle_pitch]
4. Tie up loose ends
It’s worth considering estate planning, which will ensure your last wishes are taken into account. Going through the estate planning process will allow you to make decisions about how you want your loved ones to be taken care of. You can also make sound decisions about other financial gifts.
Make sure any relevant paperwork is in a safe place known by your partner. This should include a copy of your will, any life insurance paperwork and other important information such as the name of your solicitor and your bank account details.
Take home
It may seem like a lot to think about, but remember that you are not alone. You are part of a partnership. Being open and honest about your finances is an important part of managing money in a marriage.
