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Finances for Newlyweds
You’ve been dreaming about it and planning non-stop, and now the big day is almost here. Congratulations! Did you know that one of the best ways to prepare is to get on the same financial page with your soon-to-be-spouse? Open communication is always a great idea, especially when it comes to your money.
Here’s a checklist you both should complete before and after you tie the knot.
Before the Wedding
Have the talk. First things first. Have an open and honest conversation with your significant other about the state of your finances. Discuss credit scores, outstanding debt, current income, credit cards and expenses. Once you have a better grasp on both of your financial situations, you can start to think about the best way to move forward.
Assess debt. We’re in the age of massive student loan debt — which is why a conversation about whether or not you’re in the red, and if so, is so important. That way, you can decide if the two of you should take on each other’s debt or pay separately.
Pad your accounts. It’s simple — start saving ASAP. If you’re planning a large wedding, you’ve probably already got a head start. But it’s important to think beyond that — mortgages, car payments, emergency funds, and kids — they’re all part of the potential financial picture. So save, and spend, wisely.
Get planning. Set time aside to compile all your bills and calculate all of your monthly expenses — both shared and your own. Then calculate your combined income. Once you decide on how much to set aside each month for savings, create a budget that works for the both of you.
After the Wedding
Evaluate your accounts. While you’ve probably talked about it before you tied the knot, decide how to combine your finances. You can set up joint accounts to pay bills and create a savings plan, or keep everything separate — or create a mix of both. As long as your bills are being paid on time, no plan is a bad one, it just depends on your shared lifestyle.
Prep for tax time. Check with your tax professional about whether you and your spouse would benefit from filing your taxes together or separately. Then, do a check up on your payroll withholdings and update them as needed. Not sure how much to withhold? This handy calculator can help.
Update important docs. Now that you’re married, you can now name your spouse as a beneficiary on things like your life insurance policy, will or 401k. This means your spouse would collect the money should anything happen to you. Your agent can help you update your life insurance policy when the time is right.
Once you’ve completed these smart moves, it’s important to check in with your spouse frequently in order to evaluate and adjust your financial plan as needed. That way, you and your finances are all set to live happily ever after.