Getting married - managing your money as a couple
Making a commitment to share your life with
another person is a significant milestone and there is a lot you can do to
manage your money as a couple.
The earlier you start having conversations
about your shared finances, the easier it is to establish shared goals and
strategies to reach them.
Single or joint accounts?
There is a variety of ways you and your
other half can manage your combined finances. Some couples choose to keep their
money entirely separate, others pool everything together but for many couples
it’s a case of achieving the best of both worlds by having individual accounts
as well as a joint account.
Often couple would open a joint account to
use the money for things such as shared household bills and limits on the
amount the couple can each withdraw without first discussing it with the other
half. Consider having two signatories for withdrawals. It’s not always
practical, though it will protect your stake of the account balance if the
relationship hits a rift.
You may not want to give up your financial
independence entirely. Maintaining an account in your own name means you could
have more control over how you spend your money.
Whatever works for you as a couple.
How much does a wedding cost?
The sky is the limit when it comes to
weddings and while Australians spend an average of $36,0001 on
their wedding, you could get away with far less or spend considerably more. The
key is to plan ahead and aim to pay for as much of your wedding as possible up
front. The last thing you need is to head into married life laden down with
debt.
Setting your wedding budget
No matter whether you want your wedding to
be a blockbuster celebration with hundreds of guests or a small intimate
affair, it makes sense to establish a wedding budget. Not only does this let
you manage the cost of the wedding, it helps pinpoint areas where you could cut
back to have a bit more to spend on other aspects of your special day.
Your wedding budget can also form the basis
of your ‘to do’ list to ensure nothing is overlooked.
Tips to save for the big day
·
Make key bookings early. Like your wedding venue and reception and explore options of
payment (e.g. pay the cost gradually, pay up front).
·
Lay-by your wedding gown or
men’s attire. It’s a way to avoid interest charges
or think about a pre-loved gown to enjoy big savings (after all, it’s only been
worn once before).
·
Consider holding your
wedding on a weekday. You’ll pay far less for a
reception than if you get married on a weekend.
·
Open a high interest savings
account. It’s a great place for you and your
partner to grow a wedding fund.
·
Ask friends and family to
fund a particular aspect of your wedding in lieu of a gift. Small contributions quickly add up, like paying for invitations
or the groomsmen’s corsages. It makes your wedding affordable and helps the
people who matter to you get involved – and you won’t be lumbered with half a
dozen electric fry pans as gifts.
Changing your last name
If you plan to take on your spouse’s name,
you will need to apply to the office of births, deaths and marriages in the
Australian state or territory in which you were married. Once you receive your
formal marriage certificate, be sure to notify your key financial institutions
of your name change.
Personal insurance and health insurance
as a couple
When you become a twosome, it’s important
to look at some insurance. You may choose to take out health insurance as a
couple. It could mean saving on premiums though be sure to check if any
penalties apply if you bail out of your current health fund. Compare health
insurance products at the Federal Government’s Private Health website.
Be sure to review your personal insurance
cover too. You need to be confident you both have sufficient cover in place to
allow your other half to be financially comfortable if anything were to happen
to you. This is especially important if you take on major commitments like a
home loan or start a family.
Organise your will
None of us like to consider our own
mortality – especially if you’re about to get married but having an up to date
will is essential when you are part of a couple.
Your solicitor is probably the best person
to draft a legally binding will. It may not be a good idea to rely on do it yourself
will kits as there is too much at stake if any aspect of your will is not
legally binding.
Your superannuation is normally distributed
directly to your dependents (e.g. spouse or children) after you die and does
not form part of your estate. Thus where eligible, you should complete a
binding death nomination and lodge it with your super fund to state quite
clearly who you would like to inherit your super. Your will should still make
allowance for your superannuation.
Saving for a honeymoon
It makes sense to start saving for a
honeymoon as soon as you decide to tie the knot. This gives you more time to
tuck money aside so you won’t have to turn to a personal loan or credit card to
pay for your trip.
Decide where you would like to go, compare
prices for accommodation, airfares and other costs like dining out, day trips
and souvenirs to arrive at a total cost for your honeymoon. Now, work out how
much you need to set aside regularly to meet the cost before your head
off.
There is an option of seeing a financial
adviser as a couple
Working with a financial adviser can be a
great way to help understand each other’s financial goals. Your adviser can
assist you create a joint financial plan that lets you work together to achieve
your shared dreams.
1MoneySmart
questionnaire, December 2013, 400 online respondents – https://moneysmart.gov.au/family-and-relationships/getting-married
Source: BT