Financial adjustments for newlyweds are seldom easy because both you and your partner have been accustomed to making money decisions on your own. Addressing personal finance and investment issues together will help you plan for your future as a married couple and allow you to address any potential issues before they become serious problems.
We’ve put together some financial tips for newlyweds that will help you start your marriage on the right financial foot:
Discuss financial styles before the big day
Take time to have an honest discussion about financial habits and objectives with your partner. Are you a saver? Or do you tend to live paycheck to paycheck? What kind of investments have you made? What about your prospective spouse? What are your long and short-term financial goals? Do you or your partner have any debts? It’s important to be as open as possible about these types of questions.
Start thinking as a couple
When you’re making financial decisions as a married couple, it’s important to think holistically. For instance, if both you and your spouse contribute to 401(k) plans and IRAs, see how your investment choices match up. Depending on your goals for retirement, one or both of you might want to invest more aggressively. Or you might find that your combined portfolio is more exposed to risk than the two of you can tolerate. Also, take the time to re-examine your insurance policies, such as your car insurance. You may end up paying less if you combine your policies.
Decide how you want to pool your money
One of the biggest decisions you’ll make in a marriage is whether or not you will be pooling your money together. There are pros and cons to each decision, so be sure to talk this out ahead of time. Improper planning can lead to arguments and hurt feelings. (If you’re interested in this, our article about The pros and cons of joint checking accounts might help.)
Update your documents
Remember to update your information on life insurance policies, IRAs, employer-sponsored retirement plans and pensions. Also, make sure both you and your spouse know where all your financial documents are stored or how they can be accessed online.
Update your wills
Modify your will or create one if you haven’t yet. Don’t delay on this important item.
Revisit your tax status
Once married, you’ll need to decide whether it’s best to file your taxes jointly or separately. Usually, the “married filing jointly” status results in lower tax liability, but this isn’t always the case. Depending on deductions and income earned, “married filing separately” may be more advantageous.
Have regular family financial meetings
Ongoing communication about money will keep your financial health strong. Make it a point to sit down and discuss financial matters at least once a month with your spouse. This can include goals, upcoming expenses, saving strategies, budgets and other matters.
Work together to end debt
It’s likely that either you or your spouse is entering the marriage with some debt. Make sure you are aware of each other’s debt and determine the best way to pay it off. Write down what is owed, interest rates, due dates and balances and then agree on a plan to eliminate that debt.
Meet with a financial advisor
Consider making an appointment with a qualified financial professional to discuss your financial goals. This type of planning will help you with future steps such as buying a home or investing for retirement.
Addressing these financial issues together will help you ensure all your financial bases are covered and set you up for a lifetime of financial health.