Financial Planning After You Get Engaged
Once you officially announce your engagement, it's time to put your heads together and start thinking like a soon-to-be-married couple. Wedding planning is often the first task you'll tackle together and it may also be the first time you make joint financial decisions. Learning how to manage money as a couple, after you get engaged, is an important skill that will carry you not only through the wedding but through the rest of your lives together.
Setting a Wedding Budget
Wedding planning should start with an estimated amount or range of how much you want to spend on your big day. Your budget will depend on a number of factors including the time of year, the number of guests you plan to invite, and the location of your event. First, decide what type of wedding you want — big or small, a destination wedding, or in your hometown. Once the big picture items are selected, you should try to set up a budget to include all of the small items such as invitations, flower arrangements, and reception entertainment. You can use a wedding checklist to ensure you don't forget anything important.
Practice Working as a Couple to Make Joint Financial Decisions
Planning a wedding can act as practice for when your finances are combined. You and your partner will need to share the cost of wedding bills and decide how to allocate your money. For example, you may want to splurge on centerpieces, but your fiancé may want to order a more elaborate wedding cake. Narrowing down what's important to each of you by talking over your preferences can help you allocate your limited funds. You may also want to divide and conquer when tackling your wedding checklist. Vendor research can take time, and chances are, both of you are working full-time and keeping up with your normal lives outside of wedding planning. Perhaps, one of you can look for wedding transportation by calling limo services, while the other researches florists or local DJs. Planning a wedding in this manner can help to set the stage for future essential money decisions like setting a household budget or saving for major milestones such as a home purchase.
Decide How to Finance Big Purchases After You Get Engaged
Do you need to buy a house, wedding rings, or a new car before the big day? As you move on with your lives together, chances are you'll be making larger purchases that may require applying for a loan or mortgage. If you haven't already discussed your credit history, now is a good time to review your credit report and clean up any issues. To improve your credit and simplify your monthly payments, you may want to consolidate existing loans and decide how you'll pay for items you need to finance before the wedding. You may also want to compare credit card offers and pay for wedding-related expenses on lower rate credit cards, or cards that offer you the best rewards if you're trying to rack up points to help defray honeymoon costs.
Save for Your Future
Chances are, you'll be receiving some monetary gifts from wedding guests and you may want to open your first joint savings account for the funds given to you as a couple. Together, you should decide on how to use the cash — whether that's to fund a new home or car purchase, buy furniture, or even pay down some of your existing debt. Learning how to prioritize as a couple and stick to a household budget may take time, but financial discipline can help you transition from single to married, and carry you into the future as your family grows.
As an engaged couple, wedding planning is the perfect opportunity to let both of your personalities shine through on your special day while learning how to spend and save together.