As women, we go through many life stages. Some stages require us to completely change our financial strategy, while others merely require a simple tune-up or small adjustment to the overall strategy. If you are a woman just starting your career or simply just taking control of your finances for the first time, here are some helpful tips as you navigate through this new life stage.
Schedule Team Huddles
Schedule Team Huddles with your partner to ensure you are talking about your finances and other important topics on a regular basis. Make sure to schedule your team huddles during a time in which the both of you can be devoted to the conversation at hand. Talking about money may not be easy at first, but remember it is necessary as almost everything you do in life costs money. Just like anything, the more you talk about money the easier it becomes.
Understand each other’s money history, personality and values
Part of your Team Huddles should be discovering your partner’s money history, personality and values. I would recommend you know these things before you get married, but even after you get married, you will want to continue to discuss these topics as they typically shape how we feel about money today. Remember it is okay to have differences when it comes to money. The important part is to learn how to work together with those differences.
Create a Financial Plan together
Creating a new financial plan once you’re married will help ensure you are maximizing both incomes and assets toward your joint financial goals. Make sure you are working together on your dreams- buying a home, starting a business, financial independence, etc. Working together on common financial goals will help you grow together as a couple. Keep in mind not all your short term and long term financial goals have to be in sync; it is okay for you to still have your own goals. However, you do want to talk to your partner about what those goals are and make sure you have a clear financial plan on how to achieve them.
Set up a Joint account
Once you have defined your financial goals, you will want to set up a joint checking account to pay the household bills and a joint savings account for your joint cash cushion. You will want to use the- yours, mine, ours approach– so keep your own checking and savings account and determine the amount you will contribute to the joint accounts every month. Consider a fair split to the joint account, meaning if you make different incomes you may want to split household expenses proportionately to your income, rather than 50/50.
Protect each other with insurance
Now that you are married you will want to get the proper amount of life insurance in place to help protect against premature death. Life insurance can provide the surviving spouse with the amount needed to replace the income lost and continue to help save for future financial goals.
Create legal documents
Update your wills, trusts and other legal documents. Also check the beneficiary designations on all your accounts to ensure they match you and your partner’s wishes. This would include your bank accounts, retirement accounts, life insurance policies, annuities, etc.
Review your tax strategies
In most cases, once you are married you will be able to file joint income tax returns. This means your tax bracket may change and therefore you will want to confirm your tax withholdings are still accurate. Also, review other tax strategies based on your new financial situation and joint financial goals. The goal is to try to break even with the IRS every year, meaning you don’t want to owe any taxes or get a large refund back at the end of the year.
Celebrate your differences and don’t sweat the small stuff
Remember doing work you are passionate about and enjoying your life with the one you love should be top priorities. Everything else can be worked out. Chances are you will be someone who does not think, act, behave, or dream exactly the same way you do, so coordinate with one another to use each other’s strengths. If you are a saver and he is a spender, create a spending plan that allows for both. If one of you likes to create excel spreadsheets, make that person in charge of tracking the monthly expenses. Acknowledge and take advantage of your strengths and don’t worry so much about the small stuff.
Become each other’s support team
You are a team now and you need to become your partner’s coach and number one fan. Encourage each other to still work on your individual dreams and life aspirations, and hold each other accountable toward the various goals you are working on. Hold mini financial challenges to stay motivated along the way and always remember to work as a team. Your journey toward financial success will be a lot easier and more fun when you can share it with the one you love most.