Financial Decisions to Consider as a Newly Engaged Couple

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The engagement period is typically filled with immense joy and bliss. After all, you've found the one your heart can't live without. Even though it's easy to focus on the love and excitement of it all, it's imperative that you two consider the financial decisions that will directly impact the health and longevity of your union. One of the top reasons people divorce is money. Whether it's mismanagement, financial abuse or total dishonesty, money can truly break people apart. When you have the hard conversations in the beginning, you'll develop a strong foundation that will keep you two together for the long haul. Consider some of the major financial decisions to consider as a newly engaged couple.

1. Bank Accounts in the Marriage

While joint accounts are standard for many couples, separate accounts are becoming increasingly popular. In order to keep the peace in the relationship, many couples opt to keep their finances separate. You two can also opt to have a joint account to manage household expenses, savings and other line items. The separate accounts can be used for personal spending or miscellaneous purchases. Whatever you two decide, make sure you're mutually happy with the decision.

2. Budget for Pre-Engagement Festivities, Wedding and Honeymoon

While one person might want an elaborate wedding with a live orchestra and doves, the other person might want an informal elopement ceremony. The engagement party, pre-marital counseling and other wedding expenses can add up. Get clear on the vision you two have for your wedding and honeymoon because the costs will differ. Whatever you think it'll cost, budget for much more because weddings can easily cost tens of thousands of dollars.

Don't forget about the engagement ring. When you're newly engaged, you might be blinded by the beauty of the ring on your finger. However, you use your fingers every day to do various tasks. If someone tries to steal your ring or an accident occurs, you'll lose a hefty investment you made. Have a conversation with your spouse about engagement ring insurance. It's better to be safe than sorry.

3. Life Circumstances vs Finances

Life will present its own challenges and hardships. Making sure you two have the financial capacity to handle the storms is key. If one person loses their job, what will you two do? If you plan to have children, will you use daycare or ask one partner to stay home to raise them? If a parent gets sick, will you two take that parent in? How much money would you all like to amass over the course of your union? How much debt do you both carry? What are your credit scores? Are you interested and prepared to buy a home in the next few years? These are all realistic questions to consider as a newly engaged couple because these answers will determine the quality of life you experience together.

4. Frequency of Financial Meetings

It's not okay for one person to keep their head in the sand while the other manages the bills and family finances. Instead, consider how often you two will sit down for financial meetings. Whether you do them bi-weekly or monthly, make sure you two are consistently having conversations about money, how it's growing or how quickly it's disappearing. These financial meetings aren't solely for arguments about how you think the other should spend the money. These meetings are also meant to be productive and proactive responses to your current financial situation.

5. Prenups/Post-Nups

A lot of couples are waiting until they're in their 30s and 40s to get married. By this time, many people have built assets on their own. An honest and fair conversation needs to take place surrounding prenuptial agreements. It's better to have these conversations and agreements when you two are madly in love and want the best for each other. Even though you don't want to plan for a divorce, you never know the future. With that understanding, a prenuptial agreement can protect you and your assets in the unfortunate chance that divorce is on the table.

Conclusion

When you don't know how to handle these predicaments and conversations, it's tempting to avoid them. Instead, face them directly. When you really care about maintaining a long-lasting love, you'll have detailed conversations surrounding the financial health of your union. Consider getting a professional third party to counsel you two through the process. Do not hire a relative or a mutual family friend. Instead, hire someone who can be a completely neutral party who holds experience in walking couples through financial management. When you introduce a financial manager into the equation, you'll also equip each other with the tools to succeed and remain accountable.