Laying all your cards on the table and creating open channels of communication are excellent ways of laying a foundation for good money management in marriage. If you’re newlywed, here is some advice for a happy financial future together:
Create open dialogue
Spend time talking openly and honestly to each other about your money hopes, fears and dreams. Your family history, how you were raised, your value system and your access to money will all have had an impact on your relationship with money. Commit to understanding how your partner feels about money, what their fears are, how he feels about debt, whether he is a saver or a spender, how much he earns, and what his financial value system is.
Set up the money mechanics
Have an open discussion about how to set up the mechanics of your respective finances in terms of bank accounts, credit cards, homeownership and bond, payment of accounts, and sharing of expenses. How you choose to set up your money mechanics will depend on a number of factors including your matrimonial regime, employment status, whether you own a business and how your respective estates are structured. When setting up your banking and other accounts ensure that, in the event of a tragedy, the surviving spouse will have access to funds and can continue to pay the household bills.
Be a formidable team
The best way to ensure financial success as a couple is to manage your money as a team and to share responsibility. Allowing one partner to take full control of the household finances can cause endless problems down the line. Importantly, keep your finances private from family and friends. Disclosing your personal finances to others can lead to a breakdown in trust and resentment within the marriage. Set ground rules for lending money to others and stick to your promises. Agree on your respective roles and responsibilities when it comes to managing money and hold each other accountable. Avoid making major financial decisions without involving your partner and be sure to meet regularly to discuss your finances. Importantly, set aside ‘fun money’ that you can use and enjoy together.
Have shared values
Discuss your respective financial value systems regarding raising children, helping aged parents, giving to charity and social upliftment. Does one of you want to be a stay-at-home parent? What happens if you inherit? Will you accept financial assistance from your parents to purchase your first home? What do you want to teach your children about money? How will your spouse feel if you earn more than him?
Have a shared vision
If your respective visions for the future are not aligned, now is a good time to start. How does each of you feel about emigration? Do you both want children? How do you feel about retirement? Work towards creating a set of shared values and goals that you can work towards together. Ideally, find a financial planner that will develop a joint financial plan for you, ensuring that both partners feel heard and acknowledged. Demonstrate respect for your partner’s goals and dreams if they differ from your own.
If you’ve gone into debt to pay for your wedding, make eliminating this debt your single biggest priority. Once you’ve got your debt out the way you can begin saving towards your joint goals. If necessary, delay your honeymoon until you’ve managed to accumulate enough money to pay for it upfront – and don’t feel pressured to honeymoon in exotic locations that will fill your Instagram feed but empty your bank account. Explore local destinations and get to know your own country.
If one of you has chosen to change their surname, ensure that you complete the necessary applications with Home Affairs and then be sure to amend your surname at all relevant institutions including your bank, medical aid scheme, utility services and other providers. Financially, it is likely to be more cost-effective if you and your spouse register on a single medical aid with a family gap cover benefit. If you have life policies or group cover in place, be sure to amend the beneficiary nomination on these policies. Ideally, set up a joint filing system for your finances and share PIN codes and passwords with each other. Keep originals as well as scanned copies of marriage and birth certificates, ante-nuptial contracts, passports and IDs.
Provide for each other
As soon as you are married, take time to review and update your wills to ensure that your partner will be provided for in the event of your death. Each of you should review your life cover to determine whether there are any shortfalls in cover. Consider signing a living will or advance directive and appointing your spouse as your medical proxy. This means that if you are ever in a position where you cannot speak for yourself, your spouse can act as your proxy when communicating with your doctors and specialists.
Maximise your tax benefits
If you haven’t done so already, ensure that you are both registered as taxpayers and commit to keeping your taxes up to date. Structure your investments to take full advantage of the tax breaks offered by retirement funds. Your financial planner will be able to advise you on the most tax-efficient premiums for your respective retirement funds to ensure that, as a couple, you can reduce your tax burden.
Make it a date
To maintain the lines of communication, commit to short monthly meetings to review your finances, revisit your goals and take stock of your progress.