Financial checklist for newlyweds

Getting married can be one of the most meaningful milestones in someone’s life — it may also mean combining your finances and re-thinking your strategy. As you build your life together, aligning on separate or shared accounts, budgeting and spending, and investing approach will be a vital part of reaching your individual and joint financial goals. Here’s a helpful guide to get the conversation started.

Finance and marriage 101: Getting on the same page

Feelings about money

This is a somewhat “softer” topic than other financial issues but important to discuss, as deep-seated feelings about money can color an individual’s actions throughout life. Some talking points to kick off the conversation:

• How did your family treat money when you were growing up?
• What does money mean to you? Is it security? Freedom? Stress? Self-worth? Something else?
• What’s the largest amount of money you’d spend on a car? Or a vacation? Or some other expense that’s important to you?
• What would you be willing to go into debt for, and how much debt would you willingly incur?

Financial issues to discuss before marriage

When entering a relationship, each person brings their own financial footprint. Analyzing each of your current financial positions, identifying where each of you are strong and where you need to improve can help you build a joint strategy going forward. The subject of debt is of particular importance because your partner’s debt may also become yours, and vice versa.

• How much do you earn?
• How much do you spend?
• How much have you saved?
• What are your debts?

Is it better to have a joint account or separate accounts?

When it comes to sharing finances, there’s no one “right” answer for everyone — but there should be agreement on how things are handled. You’ll want to ask several questions:

• Will you combine income and expenses, or will each partner keep their income separate and pay their share of the expenses? Something in between?
• Which accounts will be joint and which will be separate?
• Who will be responsible for paying which bills?
• When do you consult each other on financial decisions, and how will you decide on things that affect you both?

Finance and marriage 201: Working as a team

Budgeting and spending 

Budgeting and spending decisions will be part of everyday life for you and your partner. Some people fear that setting a budget will prove confining, but budgeting can actually empower you to spend within your means while moving toward your financial goals. Some key factors to consider:

• What does a budget look like for you and your partner?
• How often will the two of you review your spending and saving?
• When will you consult each other on purchases?

Setting short- and long-term financial goals together

Everyone has a different investment personality and approach. Whether your financial outlook significantly changes when you get married or mostly stays the same, it’s important you and your partner align on your lifestyle and overall goals. Some will be long-term, like buying a home or planning for retirement, while others will be shorter-term, like contributing to an emergency savings account or saving for a large purchase.

You can expect these to change over time, but it’s helpful to understand what’s important to one another, how you each prioritize what you want to accomplish and how you might compromise.

Finance and marriage 301: Prepare your family’s financial future

Maximize the value of your benefits

If you’ve been married before, make sure you understand any potential impacts to your Social Security benefits before getting remarried.

If you and your partner are employed, you may have the option to take advantage of each other’s employer benefits to minimize costs while maximizing value. In fact, newly married employees have access to a special enrollment period to update benefit elections if that’s the ideal option for you. Each partner should review their employee benefits. Determine which spousal benefits are available (medical, dental, vision, life, etc.) and how to coordinate benefits if one medical plan is more economical or comprehensive.

If getting married means more income and/or lower expenses, revisit your employer-sponsored retirement plans to see if you can boost your contributions.

Don’t wait until April to think about taxes

People don’t often think about their taxes until it gets close to filing season, but keeping your taxes in mind year-round can offer benefits, especially when you get married. Some factors to consider:

• Adjust your tax withholding on Form W-4 at your employer to reflect your new marital status.
• Ask your tax professional whether separate or joint tax-filing status is more appropriate.

Ensure your family is taken care of if anything happens to you

As your family grows and your finances becomes more complex, a vital step in your financial journey is to protect yourself and your loved ones. No one wants to think about the worst happening, but it’s important to ensure your family is protected should anything happen to you.

• Update titles, accounts and property to designate beneficiaries.
• Review life insurance policies and update beneficiaries and coverage amounts.
• Work with an attorney to create a will, living will or advanced health care directives, durable power of attorney, and health care power of attorney. Explore if a trust is appropriate.

Discuss the need for professional advice

Most couples can benefit from working with financial, tax and/or legal professionals. This is especially true if either of you have been married before, you already have children or either of you are bringing significant assets or debt to the marriage. An expert can help identify opportunities and avoid pitfalls.

• A financial advisor can help you work through many of the items above. They can set an appropriate financial strategy for your unique family situation and help you adapt to changing factors over time.
• A tax professional can help determine ideal withholding and tax-filing status.
• An attorney can help with a prenuptial agreement and create or update estate plans.

How we can help

When you’re married, there’s a lot to think about. Your financial advisor can help guide you through the financial questions you’ll face. Talk to us to help define your goals and make sure you both stick with the appropriate strategy to achieve them.