So, one of you popped the question, and you’ve decided to get married. Congratulations! Finding a lifelong partner is a big deal, and this moment should be celebrated. Unfortunately, as soon as you share the news or post the I Said Yes! picture to Facebook, all of the decisions that come with getting married start to unfold. From planning the wedding to fielding questions from your in-laws about when you’re going to start a family, you’ve got a lot on your mind.
The last thing you want to deal with is organizing your finances during this busy time. Luckily, digging into your approach to money as a couple doesn’t have to be as difficult as you think. Getting a few key issues out in the open can save you years of arguments and stress. Ready to team up and dive in? Let’s go.
Conquer Your Cash Flow
The easiest place for you and your partner to start your financial journey together is your cash flow. Cash flow conversations might include:
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
- Your individual and joint goals
- Different approaches to spending money
- How you want to approach saving together
- Creating an income and expense plan
- Establishing responsibilities (like who pays the bills)
- Understanding each other’s use of credit
Most of these conversations are relatively basic, and can even be exciting. Exploring your goals both personally and professionally, and aligning financial goals to support the vision you have for your life together is enjoyable. Lean into these conversations, and see where they take you!
It’s also important to understand that some of these financial basics will change over time. For example, your responsibilities in your marriage may change. It may make sense for you to manage the finances during one season, and for your partner to take over in the future if personal or professional demands on your time change.
Additionally, your goals will likely shift over time. You can’t expect one savings plan, or debt-payoff strategy, to work for forever. Your dreams will grow as the two of you go through life together, and that’s OK. Make a plan to revisit short- and long-term goals annually in the future.
Address Your Debt
It’s always surprising to hear how many newly engaged couples have never reviewed one another’s debts together. Although debt is often something we feel ashamed of, you shouldn’t keep it a secret from your partner.
Together, you should review how much debt each of you is dealing with, what your total payments and interest rates are for each debt you have, and what your payoff plan is. It’s also worthwhile to discuss how your debt is impacting your credit scores. This information is important, especially if you’re considering taking out a joint mortgage using each of your credit scores.
Organize Your Assets
If you’ve been together for a while, you may have already combined your assets. However, if you haven’t, now is the time to determine how you want to navigate those conversations. For example, you and your spouse might decide to combine all of your accounts to keep things streamlined, or you may decide to have two combined “hub” accounts for bills and savings, but maintain individual checking accounts for personal spending.
Plan for Insurance
If each of you is currently covered by your current employer’s health insurance policy, you’re in a good spot. However, now is still a good time to explore your different family insurance options to make sure you’re getting the best coverage for the lowest rate. During your next open enrollment period, you can make any necessary changes — or, after you’re married, you can take advantage of changing policies due to a qualifying life event.
Beyond just health insurance, you and your partner should also look at:
- Life and disability insurance. Do you have enough coverage to protect your soon-to-be spouse if your income was lost? Consider increasing coverage through your employer.
- Homeowners/renters insurance. Make sure your policy has both of you listed.
- Auto insurance. Now is a great time to shop around for new rates! Getting married may decrease your rate, and you can decide if your current policies are still meeting your needs.
Taxes
Getting married means reviewing your filing status, updating withholdings, and adjusting contributions to tax-advantaged accounts based on your new, combined gross income. Now is a good time to reach out to a CPA to make sure you’re filing correctly after the wedding.
Other Considerations
Although many of the financial “basics” that come with getting married are reviewed above, there are a handful of additional considerations to keep in mind. First and foremost, you’ll each want to go through all of your accounts to make sure your beneficiaries are updated. You might also want to have conversations about any previous marriages, and joint assets that your ex-spouse has access to, as well as any children from previous marriages and how they impact your financial goals. Finally, you might decide together that a prenuptial agreement is in both of your best interests, depending on your unique financial situation.
Need help? Click here to get a free pre-marriage financial checklist to help you and your partner stay organized. Congratulations on this new chapter in your life!
Disclosure: For a comprehensive review of your personal situation, always consult with a tax or legal adviser. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.
-
The Social Security Test Every Wealthy Retiree Must TakeWhen you work and collect Social Security benefits before your FRA, you are subject to the Retirement Earning Test that could result in a temporary reduction of your benefits.
-
I'm a Government Employee and Need to Get By Until the Shutdown Ends. What Can I Do?The second-longest shutdown in history is leaving many federal workers with bills due and no paycheck to cover them. Here's what you can do to get by.
-
I'm a CPA: Control These Three Levers to Keep Your Retirement on TrackThink of investing in terms of time, savings and risk. By carefully monitoring all three, you'll keep your retirement plans heading in the right direction.
-
This Is Why Judge Judy Says Details Are Important in Contracts: This Contract Had HolesA couple's disastrous experience with reclaimed wood flooring led to safety hazards and a lesson in the critical importance of detailed contracts.
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
-
Social Security Wisdom From a Financial Adviser Receiving Benefits HimselfYou don't know what you don't know, and with Social Security, that can be a costly problem for retirees — one that can last a lifetime.
-
Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest EggA sizable nest egg is a good start, but your plan should include two to five years of basic expenses in conservative, liquid accounts as a buffer against market volatility, inflation and taxes.
-
Ten Ways Family Offices Can Build Resilience in a Volatile WorldFamily offices are shifting their global investment priorities and goals in the face of uncertainty, volatile markets and the influence of younger generations.
-
Should Your Brokerage Firm Be Your Bookie? A Financial Professional Weighs InSome brokerage firms are promoting 'event contracts,' which are essentially yes-or-no wagers, blurring the lines between investing and gambling.
-
Supermarkets Have Become a Pickpockets' Paradise: How to Avoid Falling VictimSome stores regularly rearrange inventory with the aim of increasing purchases, and they're creating opportunities for thieves to steal from customers.
