Financial Planning: A Smart Investment Before Marriage

"And they lived happily ever after." Most married couples have envisioned that after the wedding, all will be well, similar to the fairy tales we grew up hearing. However, in reality, you need to see the financial picture of getting married. Hence, even before you say "I do", you need to be smart in handling your financial situation. Here's what you need to do:

Financial Decisions: How to Manage Money Before and During Marriage

Before getting legally married, you must have a talk with your future spouse about financial matters. It is not an easy task, but this would help you create a financial plan of action on how as a married couple would you be able to handle your finances, and also mutually enjoy financial benefits.

1. Determine Your Financial Responsibilities

Before you think about the wedding costs, it pays to know the current financial foot of your partner. How do you manage your personal finance? Does your spouse have a previous marriage you need to be made aware of? If there are any, are you willing to share responsibility for your partner's debt? Do the both of you will need to maintain individual accounts, or would you need to have a joint account? Will you have a prenuptial agreement?

These questions may seem lengthy and sensitive topics, but engaged couples must be on the same page not only emotionally, but at the same time, also financially, as many old married couples will tell you, the lack of financial plans will be one of the primary reasons why couples call it quits.

2. Set Your Financial Goals

Once you have determined your financial responsibilities then you can now begin to set your goals as a married couple. Among the things you need to fulfill inside a marriage is to set goals that would affect your future together, especially in terms of finances.

You can start by creating separate bank accounts where you can start putting money towards a goal you want to achieve. For example, you can have separate accounts allotted for emergency funds, retirement accounts, travel, or even set aside money for a down payment for your dream house. This way, you sort out where your combined income will go and you can easily track them, should the need arise.

Another financial goal you can set is to ensure legal responsibilities and monthly expenses are paid. Will you be filing jointly your taxes? Do you need to consult a tax professional or the Bureau of Internal Revenue service to provide legal accounting advice for your taxes? If in case of debts such as a student loan, what is the repayment plan? How will your health care, social security benefits, and other expenses be handled?

Still, another goal you can set is to organize your own finances prior to the wedding. Before you get married, how much savings do you want to have? Will both partners handle all the paying, or will the higher-earning spouse initially handle all the finances in the marriage?

If you want to open a business or purchase a new car, will your premarital assets such as separate property may be protected, or will they become conjugal property? Discuss which option makes sense from one spouse to another, as one partner's money and savings may differ and marriage may be affected if the couple would have a different set of goals.

3. Create Investing Strategies

Now that you've set your financial goals and considered your financial responsibilities, it's time to create investment accounts and strategies that would help you grow your savings. It is not enough that you rely on your combined income as a couple, that's why it's good to check out investment products you can choose from to increase and diversify your money.

Investment Products You Can Try To Improve Your Financial Standing

a. Mutual Funds

One of the emerging ways for passive income is through mutual funds. In this form of investment, you have combined assets such as stocks, bonds and other assets to grow your portfolio, which in turn you can choose to buy more investments and become more financially stable.

b. Insurance Policies

Most insurance policies of today deal with the health aspect of the person who gets it. However, those who will benefit will be the family, may it be the spouse or the parents. But did you know that there are insurance policies that also help you invest in stocks? Hence, what you pay goes a long way to growing your finances. Not only do you ensure that your family is protected should there be an accident that may happen, but at the same time, you can give them seed money because you have also invested in stocks within the same policy.

c. Retirement Planning

Pension plans are a good way to plan for your retirement early on. All people reach retirement age from work, but it's good that while still fit and able, preparing for this season starts, as the more time you have, you can invest early on.

d. Marital Property

Another smart investment you can make is to acquire a conjugal property. These forms of investment are considered long-term, as it involves purchasing a house that could be used not only by the present couple but also throughout their family life and could even be passed on to their children and the next generation. Just don't forget to prepare for the estate taxes so it won't be a problem for them in the future. Want to have an easy way to purchase a residential house and lot, Lumina Homes can help you get one!

Financial planning for your marriage does not only involve the wedding preparations, it also includes financial documents and financial matters that you will have to deal with once you become husband and wife. Hence it pays to prepare in advance, so even in terms of finances, you can live up to the happy ever after you dream of.