Locate, track down and collect your account statements

There is no replacement for up-front honesty when it comes to finances, especially with your new life partner. We suggest fully disclosing your estimated annual income, the level of personal savings and debts accumulated. If you hire a financial advisor, or if you do your planning alone, there must be a starting place established with a complete look at the total balance sheet for both parties in the relationship. So, gather up your bank account statements, various investment accounts, credit card data and any other financial documents to gain a comprehensive review of your financial situation.

The cost of parenting: kids vs adult children

Communicate regularly and often about goals

Do not ever assume that you and your partner share the same financial goals. Until you spend time talking about your goals, you will never surely understand exactly what your counterpart is thinking about their financial future. For instance:

• What are the short and long-term financial objectives?
• Are there debts that require elimination?
• What is your philosophy on money?
• Do you like your living situation, or are we saving for something different down the road?
• How long do you wish to work and when might you plan on retiring?
• What is your philosophy of paying for children’s college?

(Note: Those who paved their own way for college may feel different than those that had an education provided to them with no debts.)

Your financial advisor should help you figure out how to merge all the differing expectations and figure out the best path forward that works for both parties. You will want to figure these things out before houses are purchased, children are born and before too many large financial decisions are made. For those facing a second marriage (or more), the best plan is to talk openly about goals and objectives to minimize misunderstandings and conflict.

Create a clear understanding on saving and spending habits

It is still surprising how often couples come into our office where one partner is the primary saver and the other the primary spender. It happens so often that we believe that the saver/spender balance provides stability so that a successful couple can manage enjoying and planning for a long life together. The critical item here is to understand each role in the relationship and discuss how you can work together to craft a way forward with both saving for security and spending for joy.

Create a budget

The process of documenting a plan is absolutely critical to ensure long-term success. Until the plan is put into a plan, it’s impossible to understand what money means today and in the future. Your financial advisor should have software to help capture what money comes in through income and leaves in expenses on a comprehensive basis including inflation and taxes. This may seem like a long and arduous step, but we cannot stress enough that there is no better way to encapsulate all your conversations about money until it is locked in a comprehensive plan. Seeing the mountain graphs of accumulation and the annual savings goals in print can solidify the discussions and bring together couples who spent the time necessary to successfully merge their separate finances after marriage.

Are you looking for an Arizona wealth management firm to provide personalized investment management? If so, contact the wealth advisors at Henry+Horne Wealth Management.

Michael Carlin, AIF®