A Financial Crash Course for Those Getting Married

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:

• 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.