As you prepare to start your journey as newlyweds, you have an exciting opportunity ahead—building a financial life together.

While it may not be the most romantic topic, creating a shared personal finance plan before getting married (or shortly after) is one of the most important things you will do to set your marriage up for success.

Managing money openly and honestly will be crucial to achieving your dreams and thriving as a couple.

Here's a guide to get you started on the right financial foot.

Why a Shared Financial Plan is Critical

Believe it or not, planning for your shared financial future is one of the most loving things you can do for your marriage. Here are a few of the reasons why.

A personal finance plan:

-Aligns your financial goals and priorities. Marriage merges your lives together—and that includes your finances. A shared plan gets you both aiming for the same targets so you can support each other's dreams.

-Helps you manage marital property wisely. Any assets like a house, investments, or retirement accounts you acquire during the marriage are generally considered marital property. A plan puts you and your future spouse on the same page and helps you make smart decisions together about saving, spending, and building wealth.

-Prepares you for unexpected expenses. Life brings surprises—job losses, illnesses, repairs. A plan builds the cushion you need to handle emergencies without going into debt.

-Improves communication and trust. Money issues can strain even the best relationships. Creating a plan gets everything out in the open so there are no surprises down the road.

-Sets you up for long-term success. Your financial plan evolves with major life events like having children, changing careers, and retiring. Starting early makes it easier to adjust over time.

How to Create Your Joint Financial Plan

Creating a financial plan may sound daunting, but—just like the wedding planning you did before getting married—it's very doable when you break the process into smaller, more manageable steps.

Here are our suggestions.

Review your individual financial situations.

Gather all your documents and financial information. This includes:

-Income sources and amounts

-Assets like cash, investments, and real estate

-Liabilities such as credit card debt, student loans, and mortgages

-Credit reports and credit scores

-Insurance policies

-Retirement and investment accounts

-Estate planning documents

Identify which assets are individual or marital property. Discuss your comfort level with financial risk and the existing financial obligations you each bring to the marriage.

Define your shared financial goals.

What do you want to accomplish financially as a couple? When do you hope to achieve it? Goals may include:

-Buying a house

-Starting a family

-Paying off student loans

-Saving for vacations or a second home

-Reaching retirement readiness

Establish a timeline and budget for these priorities. Since your goals will evolve, revisit this step annually.

Create a budget.

Track your total monthly income from all sources after taxes. Then list out expenses like:

-Housing - rent/mortgage, utilities, maintenance

-Minimum debt payments

-Transportation - car payments and insurance

-Food

-Insurance - from life insurance policies to car and disability insurance

-Entertainment and miscellaneous expenses

Using your income minus expenses, see how much you have left over to devote to your goals like saving for retirement. Adjust expenses as needed to align with your priorities.

Build an emergency fund.

Aim to set aside three to six months' worth of living expenses in a savings account. This will help you handle unexpected costs without going into high-interest debt. Contribute a little each month until you reach your target amount.

Manage your debt.

Review all outstanding loans and credit card balances. Make a plan to pay down high-interest debt first while making minimum payments on all accounts. Look into consolidating or refinancing loans to get better rates and decide if this is a good option for you.

Save and invest for retirement.

Take full advantage of workplace retirement plans, especially if your employer offers matching contributions. Open IRAs if needed. Agree on a percentage of your income to invest for retirement and reference your goals to choose appropriate investments.

Determine insurance needs.

Research options for health, disability, life, home, and auto insurance. Decide on appropriate coverage types and amounts based on your finances and life stage. Combine policies when possible to save on premiums.

Create an estate plan.

Visit an estate planning attorney to draw up wills, assign power-of-attorney designation, and discuss strategies like trusts. This ensures your assets go where intended if something happens to either of you.

Communicate about ongoing finances.

Set a regular time to review bills, budgets, and savings and give each other financial updates. Address issues right away before they balloon into problems.

Adapt your plan as needed.

Review your financial blueprint at least annually and adjust details based on your current situation and progress made. Life changes like new jobs, moves or kids will impact your plan.

Joint or Separate Accounts?

One decision couples have to make early on is whether to combine their finances entirely into joint accounts or keep separate individual accounts. There are pros and cons to each approach:

Joint Accounts

Pros:

-All income flows into shared accounts

-Full transparency and access

-Easier to budget together

-Aligns with financial partnership mindset

Cons:

-Loss of independence and privacy

-Risk if the relationship ends

Individual Accounts

Pros:

-Maintain some independence

-Keep some privacy over personal spending

-Lower risk if the relationship ends

Cons:

-Can enable secrecy about money

-More complex to track joint expenses

Many couples opt for a hybrid approach: keeping some individual accounts while also opening a shared account for common expenses and goals. No matter your approach, the key is staying open and honest and communicating about your finances. Set guidelines for how you'll jointly manage and contribute to accounts.

Remarriage with Child Support

If you or your spouse are getting remarried and have children from previous relationships, child support obligations can add complexity to your financial planning. Here are some tips:

-Discuss child support details upfront. Share any court orders and be transparent about the amounts being paid or received.

-Factor in child support amounts when creating a joint budget. This is an ongoing expense that should be accounted for in your monthly finances.

Look into life insurance. If the spouse paying child support passes away, life insurance can help continue providing for those children.

-Consider setting up a separate account for child support funds. This keeps it separate from joint marital finances.

-Consult professionals if modifying agreements. If there are any requests to change formal child support agreements, speak to legal and tax experts first.

-Be thoughtful about estate planning. Provide for children from previous marriages while still caring for your new spouse.

-Communicate with ex-spouses if needed. While tricky, it may be helpful to establish guidelines together about things like college savings.

-Treat all children fairly. While challenging, aim to avoid the perception of favoritism in financial support.

With openness, patience, and planning, child support can be managed in your new marriage. The keys are communication, compromise, and consulting experts when needed.

Meanwhile, developing a shared financial plan will give your marriage with a solid fiscal start.

You'll have the foundation in place to make joint decisions, achieve shared dreams, and prepare for the future.

Most importantly, you'll be embarking on your new life together with openness, trust, and a shared vision. Here's to navigating all of life's adventures hand-in-hand!

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