Getting Married Soon? Get Your Finances in Order First
With a wedding date all set, you likely have a hundred things on your mind. Consider the following suggestions to get your finances in order before you start out as a newly married couple.
Refinance Student Loans
The year leading up to your wedding day is the time to deal with education loans. It’s not uncommon for working people to have three or more separate college loans and make payments on each one of varying amounts, of course. Start your married life with a clean slate by refinancing one or all your school loans into a single obligation. Those who work with a company like the NaviRefi student loan refinance can reduce their monthly expenses significantly in a single stroke. That’s because when they create a brand-new loan that replaces all the old ones, they can end up paying much less than the previous total. College loans shouldn’t be complicated or burdensome.
Why is this so important for soon-to-be-married adults? Because lowering total monthly expenses is the name of the game for long-term financial solvency and security. It’s only logical in that doling out less money each month in expenses leaves more cash for savings accounts, IRAs, a down-payment fund on a new home, travel, etc. Of all the actions you can take during the 12-month lead-up to a wedding, getting a college loan refi is the wisest and most responsible one.
Pay Off High-Interest Debt
If you have a few, or just one, high-interest loan or credit card, try to pay down as far as possible before the wedding day. View the effort as a gift to your spouse. It’s helpful to begin your lives together on a financially sound basis. Consider having a discussion about high-interest debt and what you both can do to eliminate or minimize it before the big day.
Make a Joint Budget
No matter your age, financial situation, or how long you’ve been a single adult, it’s imperative to hash out a joint budget with your future life partner. Don’t expect to see eye-to-eye on every detail but be sure to include all expense and income categories in a rough draft of a monthly budget. Additionally, discuss long-term savings and retirement goals if you haven’t already done so. Now is the time to work through these issues to see where there might be differences.
People have unique ideas about money, the value of long-term planning, the importance of life insurance, and how much to save out of each paycheck. Developing a joint budget as a couple is a worthwhile exercise in setting common priorities and getting an idea of your differing opinions about how to manage money. Be willing to make compromises and leave a few things undecided. The main goal is to arrive at a workable monthly spending plan that can be put into operation as soon as you begin life as a married couple.
Regardless of what your current credit score is, it’s important to pave the way for an eventual purchase of a home with your spouse. While you can encourage your future partner to get their financial act together, the focus should be on yourself at this stage of the process. What are the most powerful, efficient ways to up your creditworthiness? Besides paying all bills on time and removing any errors from credit bureau reports, look at your DTI, which stands for debt-to-income ratio.
Lenders in the real estate sector place a lot of emphasis on the number. Obviously, a lower DTI gives you a better chance of not just getting a home loan but getting a favorable interest rate. Consider that on a typical 30-year loan, even a fraction of a percentage point can make a huge difference in the total amount paid. Another factor to consider is the price range of the homes you want to buy. Meet with a consumer counselor and ask for an estimate about the price points you should be looking at. The specific range is based on things like your work history, credit score, income, current assets, and age.