When the afterglow of the wedding and the honeymoon subside and the excitement of waiting for the big day is replaced with the necessity of day-to-day life, couples should begin talking seriously to one another about a financial plan for the future.
BMO Harris Bank, a division of BMO Financial Group, offered financial insights to newlywed couples last week during Money Smart Week, a public awareness campaign created by the Federal Reserve Bank of Chicago in 2002. During the week, schools, financial institutions, libraries, not-for-profits and government agencies come together to stress the importance of financial literacy.
According to Dean Urbanski, vice president, national sales manager, BMO Harris Financial Advisors Inc., couples should openly discuss their financial history and agree not to make the same mistakes as one financial entity that they made as individuals.
Couples should also create a spending plan budget that covers all expenses no matter who brings in more money. Setting goals together is another important step and couples need to discuss what they want as individuals and what they desire together.
Building an emergency fund is one of the most overlooked, yet important, steps that recently married couples can take. Saving for the purchase of a home is also important but BMO’s Harris warns couples not to overextend themselves.
Couples should also begin to save for retirement early, which includes opening up retirement savings accounts, contributing to employer-sponsored defined contribution plans and thinking about purchasing an annuity down the road.
Avoiding credit card debt is another important step for young couples.